Reichenbach Co., organized in 2014, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2014 and 2015.

Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2015, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore income tax effects.)

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7/1/14 10/1/14 12/31/14 Intangible Assets 8-year franchise; expiration date 6/30/22 Advance payment on laboratory space (2-year lease) Net loss for 2014 including governmental incorporation fee, 1,000, and related legal fees of organizing, 5,000 (all fees incurred in 2014) 48,000 24,000 16,000 1/2/15 Patent purchased (10-year life) 84,000 3/1/15 4/1/15 Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) 75,000 278,400 6/1/15 9/1/15 Legal fee for successful defense of patent purchased above Research and development costs (development costs of 12,650 45,000 incurred related to 1/2/15 patent, which has achieved economic viability) 160,000