EK Company acquired a patent on January 1, 2020 for $41,500 cash. The patent was estimated to have a useful life of 10 y

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Ek Company Acquired A Patent On January 1 2020 For 41 500 Cash The Patent Was Estimated To Have A Useful Life Of 10 Y 1 (40.69 KiB) Viewed 22 times

EK Company acquired a patent on January 1, 2020 for $41,500 cash. The patent was estimated to have a useful life of 10 years with no residual value. On December 31, 2020, before any adjustments were recorded for the year, management determined that the remaining useful life was 7 years with that new estimate being effective as of January 1, 2021). On June 30, 2022, the patent was sold for $26,500. Required: a) Prepare the journal entry to record the acquisition of the patent on January 1, 2020. b) Prepare the journal entry to record the annual amortization for 2020. c) Compute the amount of amortization that would be recorded in 2021 (Round your final answer to the nearest whole dollar.) Amount of Amortization d) Determine the gain (loss) on sale on June 30, 2022 (Round your final answer to the nearest whole dollar.) Loss e) Prepare the journal entry to record the sale of the patent on June 30, 2022.