Your company pays $620,000 for a patent that has 10 years remaining.Each year,your company should:
A)debit amortization expense for $62,000 and credit accumulated amortization for $62,000.
B)debit intangible assets and credit accumulated amortization for an amount equal to 20% of book value.
C)debit amortization expense for $31,000 and credit intangible assets for $31,000.
D)report no amortization expense because patents are not subject to amortization.

Question

Quizplus · Accepted Answer

Amortization Expense = Cost/Useful Life
Amortization Expense = $620,000/10
Amortization Expense = $62,000.

Your Company Pays $620,000 for a Patent That Has 10