Contreras Corporation acquired a patent on May 1, 2015. Contreras paid cash of $25,000 to the seller. Legal fees of $900 were paid related to the acquisition. What amount should be debited to the patent account?

Question

Quizplus · Accepted Answer

The patent account should be debited for the cost of acquiring the patent, which includes the cash paid to the seller and any related legal fees. Therefore, the amount to be debited to the patent account is the sum of these costs: 
$25,000 (cash paid to seller) + $900 (legal fees) = $25,900.

Contreras Corporation Acquired a Patent on May 1, 2015