As the recently appointed auditor for Ng Ltd., you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2022, are prepared. The controller for Ng mentions that only one account is kept for intangible assets.

Instructions

Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 12 years.

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Intangible Assets Debit Credit Balance HK$940,000 Jan. 4 Research and development costs (prior to achieving HK$ 940,000 economic viability) Jan. 5 Legal costs to obtain patent 75,000 1,015,000 Jan. 31 Payment of 7 months rent on 1,106,000 91,000 property leased by Ng HK$250,000 Feb. 11 Share premium on ordinary shares 856,000 Mar. 31 Unamortized bond discount on bonds due March 84,000 940,000 31, 2042 Apr. 30 Promotional expenses related to start-up of business 207,000 1,147,000 June 30 Operating losses for first 6 months 141,000 1,288,000