In $2021,$ Space Technology Company modified its model Z$2$ satellite to incorporate a new communication device. The company made

the following expenditures:

Basic research to develop the technology

Engineering design work

Development of a prototype device

Acquisition of equipment

Testing and modification of the prototype

Legal and other fees for patent application on the new communication system

Legal fees for successful defense of the new patent

Total

The equipment will be used on this and other research projects. Depreciation on the equipment for $2021$ is $$30,000.$

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. $($If no entry is required for a transaction$/$event$,$

select $"$No journal entry required" in the first account field.$)$

Answer is complete but not entirely correct.