Parker Corp. develops computer video games for sale. A new development project which began in 2018 reached technological feasibility at the end of Sept. 2019 and the project was available for release to customers early in 2020. Development costs incurred prior to Sept. 30 were $1,600,000 and costs incurred from Oct. 1 to product availability were $1,200,000. Revenues in 2020 from the sale of the new product were $4,000,000 and the company anticipates another $12,000,000 in revenues. The economic life of the software is 3 years.

(a) What amount should Parker capitalize as an intangible asset?

(b) What amount should be amortized in 2020?

(c) At the beginning of 2021, Parker estimates the net realizable value of the software to be $500,000. Prepare any entries required.