On January 5, 2022, Akamah Limited purchased a trademark on a product for $540,000. Akamah correctly recognized the expenditure as asset as of 1/5/22. The trademark had 10 years remaining for its legal life when Akamah purchased it. In January 2022, Akamah determined that due to new products being developed by competitors that their product and the related trademark would only be effective for 5 years. After 5 years Akamah's product would be obsolete and no longer used. Akamah is using the straight-line method for amortizing the patent. Akamah recognized the following journal entry on 12/31/22.

 If Akamah Limited is permitted to recognize amortization expense, what is the correct amount to amortize for the patent for the year ending 12/31/22?

If you determine that a journal entry is necessary remember that the Cash account will not be used.  Also, remember that you will need to determine if the correct journal entry was never recorded versus if a "correcting" journal entry needs to be recorded. If necessary,  a journal entry for the company as of December 31, 2022. If a journal entry is not necessary, indicate N/A.

Answer rating: 100% (QA)

To calculate the correct amount of amortization expense for the patent for the year ending December ... View the full answer