Lakeshore Company has two intangible assets at the end of the year. 1. On July 1, Lakeshore

Question:

Lakeshore Company has two intangible assets at the end of the year.

1. On July 1, Lakeshore joined a franchise business and paid $60,000 for a 5-year franchise agreement.

2. On October 1, Lakeshore purchased a copyright for $26,000. The copyright had 25 years of legal life remaining; however, Lakeshore estimated that the copyright will have no value after 20 years.

Requirements

1. Record the acquisition of the two intangible assets.

2. Calculate the amortization of each intangible asset at December 31.

3. Record the year-end adjusting entries.

4. What is the carrying value of each asset reported in the balance sheet?

Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...