Journal entries for patent purchase
CSI Products Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, CSI spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. CSI's year end was December 31.
Instructions
Prepare the entries on the books of CSI to record
a) the purchase of the patent,
b) the amortization for the first year (2020),
c) the defence of the patent, and
d) amortization for 2023.

Question

Quizplus · Accepted Answer

The Answer of Journal entries for patent purchase
CSI Products Ltd. purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, CSI spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. CSI's year end was December 31.
Instructions
Prepare the entries on the books of CSI to record
a) the purchase of the patent,
b) the amortization for the first year (2020),
c) the defence of the patent, and
d) amortization for 2023.

Journal Entries for Patent Purchase