Isolution Company acquired patent rights on January 4, 2007, for $750,000. The patent has a useful life equal to its legal life of 15 years. On January 7, 2010, Isolution successfully defended the patent in a lawsuit at a cost of $90,000.
(a) Determine the patent amortization expense for the current year ended December 31, 2010.
(b) Journalize the adjusting entry to recognize the amortization.