On January 1, 2016, Gordon Company Purchased a Patent for $420,000

question 1

Essay

On January 1, 2016, Gordon Company purchased a patent for $420,000 from an inventor who had developed a new manufacturing process. At the time of the purchase, the patent had a remaining useful life of 10 years.
Required:
A.Prepare the journal entry to record Gordon's purchase of the patent.
B.Prepare the journal entry to record amortization of the patent on December 31, 2016.
C.At the end of 2019, after amortization had been recorded through December 31, 2019, Gordon concluded that the estimated future cash flows from the patent to be $250,000.The patent's estimated fair value on December 31, 2019 was $200,000.Prepare the journal entry to record the patent impairment, if necessary.

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Definitions:

Timbre

The quality of a sound that distinguishes it from other sounds of the same pitch and volume; often referred to as the "color" of sound.

Loudness

The perception of the intensity of sound waves, often measured in decibels, and subjectively experienced by listeners.

Timbre

The quality or color of sound that makes it unique, such as the difference in sound between a piano and a violin when playing the same note.

Sound Wave

A longitudinal wave consisting of compressions and rarefactions, which travels through a medium such as air or water.