$($Correct Intangible Assets Account$)$ Reichenbach Co$.,$ organized in $2019,$ has set up a single account for all intangible assets. The following summary discloses the

debit entries that have been recorded during $2020$ and $2021.$

Intangible Assets

$7/1/208-$year franchise; expiration date $6/30/28$ $ $48,000$

$10/1/20$ Advance payment on laboratory space $(2-$year lease$)24,000$

$12/31/20$ Net loss for $2020$ including state incorporation fee, $$1,000,$ and

related legal fees of organizing, $$5,000($all fees incurred in $2020)16,000$

$1/2/21$ Patent purchased $(10-$year life$)84,000$

$3/1/21$ Cost of developing a secret formula $($indefi nite life$)75,000$

$4/1/21$ Goodwill purchased $($indefi nite life$)278,400$

$6/1/21$ Legal fee for successful defense of patent purchased above $12,650$

$9/1/21$ Research and development costs $160,000$

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 $31,2021,$ recording any necessary amortization and refl ecting all balances accurately as of that date. $($Ignore income tax eff ects.