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During 2016, Bramble Corporation spent $178,560 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $30,000 related to the patent were incurred as of October 1, 2016.
Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit 2016 (To record research and development expenses)

Answer :

Answer:

See the journal entries below.

Explanation:

The journal entries will look as follows:

Date    Description                                                  Debit ($)        Credit ($)  

2016    Research and Development Expense        178,560

                Cash                                                                                178,560

           (To record research and development costs.)                                

           Patents                                                         30,000

                Cash                                                                                30,000

            (To record legal expenses.)                                                                

           Patent Amortization Expense                          750

                 Patents [($30,000 / 10) * (3/12)]                                          750

             (To record patent amortization for 2016.)                                      

2017   Patent Amortization Expense                         3,000

                 Patents ($30,000 / 10)                                                    3,000

           (To record patent amortization for 2017.)                                          

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