During 2021, Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2021, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 related to the patent were incurred as of October 1, 2021.

Instructions

a. Prepare all journal entries required in 2021 and 2022 as a result of the transactions above.

b. On June 1, 2023, Winston spent $9,480 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2023. Prepare all journal entries required in 2023 and 2024.

c. In 2025, Winston determined that a competitor’s product would make the New Age Piano obsolete and the patent worthless by December 31, 2026. Prepare all journal entries required in 2025 and 2026.