Sunland 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. 

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. 

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7/1/20 10/1/20 12/31/20 1/2/21 3/1/21 4/1/21 6/1/21 9/1/21 Intangible Assets 8-year franchise; expiration date 6/30/28 Advance payment on laboratory space (2-year lease) Net loss for 2020 including state incorporation fee, $3,000, and related legal fees of organizing. $7.000 (all fees incurred in 2020) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $40,800 28,200 13,600 84,200 82,000 278.000 12,535 169,000 7/1/20 10/1/20 12/31/20 1/2/21 3/1/21 4/1/21 6/1/21 9/1/21 Intangible Assets 8-year franchise; expiration date 6/30/28 Advance payment on laboratory space (2-year lease) Net loss for 2020 including state incorporation fee, $3,000, and related legal fees of organizing. $7.000 (all fees incurred in 2020) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $40,800 28,200 13,600 84,200 82,000 278.000 12,535 169,000

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Journal entry Event Account title Debit Credit 1 Franchises 40800 Prepaid rent 28200 Organization co... View the full answer