E9-12 The
following are selected 2011 transactions of Franco Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life
of 20 years.
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the
events above.
TUTORIAL PREVIEW
Adjusting entries would look like this:
Related to Jan. 1 transaction
You would do nothing with goodwill
File name: E9-12
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