Exercise 10-26 (Static) Research and development [LO10-8] In 2021, Space Technology Company modified its model 22 satellite to incorporate a new communication device. The company made the following expenditures Basic research to develop the technology Engineering design work Development of prototype device Acquisition of equipment Testing and modification of the prototype Legal and other fees for patent application on the new communication system Le fees for successful defense of the nei patent $2,000,000 680, 300,000 60,00 200.000 40,000 20,00 53,300,000 Total The equipment will be used on this and other research projects Depreciation on the equipment for 2021 is $10,000 During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all of the above as costs of the patent Management contends that the device simply represents an improvement of the existing communication system of the satellite and therefore, should be capitalized Required: Prepare correcting entries that reflect the appropriate treatment of the expenditures of no entry is required for transaction/event select "No journal entry required in the first account field.) View action is Journal entry worksheet Hecord the correcting entry for Scout Note Interessere