On October 1, 2022, Benji Corporation purchased a copyright for $100,000.It is estimated that the copyright will have a useful life of 8 years with no residual value.The amount of amortization expense recognized for the calendar year 2022 would be
A)$0.
B)$3,125.
C)$1,042.
D)$100,000.

Question

Quizplus · Accepted Answer

The amortization expense for the calendar year 2022 is calculated by dividing the cost of the copyright ($100,000) by its useful life (8 years) to get the annual amortization expense ($12,500). Since the copyright was purchased on October 1, 2022, only 3 months of amortization expense should be recognized for 2022. Therefore, $12,500 divided by 12 months, multiplied by 3 months, equals $3,125.

On October 1, 2022, Benji Corporation Purchased a Copyright for $100,000.It