On January 4, 2016, Franc Company purchased for $24,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2017, the company paid its lawyers $11,000 for successfully defending the patent in a lawsuit.

On January 4, 2016, Franc Company purchased for $24,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2017, the company paid its lawyers $11,000 for successfully defending the patent in a lawsuit.

I am have most of the answers, however, not sure about the account to which to expense the legal fees. Also, the amortization expense amount to be charged in 2017. I assumed it would $24,000/12 years = $2000 which was the correct amount for 2016.

List of accounts:

ASSETS

111       Cash

121       Accounts Receivable

141       Inventory

152       Prepaid Insurance

181       Equipment

189       Accumulated Depreciation

191       Patent

LIABILITIES

211       Accounts Payable

231       Salaries Payable

250       Unearned Revenue

261       Income Taxes Payable

EQUITY

311       Common Stock

331       Retained Earnings

REVENUE

411       Sales Revenue

EXPENSES

500       Cost of Goods Sold

511       Insurance Expense

512       Utilities Expense

521       Salaries Expense

532       Bad Debt Expense

533       Amortization Expense

540       Interest Expense

541       Depreciation Expense

559       Miscellaneous Expenses

910       Income Tax Expense

I have tried Misc expense and Amortization expense but it was incorrect.

For the 2017 Amortization amount, I tried $2000, but it was incorrect.

DATE    ACCOUNT TITLE POST. REF.         DEBIT   CREDIT

Jan. 4, 2016    Patent                              24,000.00

                               Cash                                        24,000.00

Dec. 31, 2016 Amortization Expense   2,000.00

                                  Patent                                 2,000.00

Jan. 3, 2017            ?????                       11,000.00

                                 Cash                                   11,000.00

Dec. 31, 2017  Amortization Expense  ?????

                                     Patent                              ???????