Brush Company engaged in the following transactions at

the beginning #2523

Brush Company engaged in the following transactions at the beginning of 2016:a. Purchased a
patent (Patent A) for $70,000 that had originally been filed in January 2010. The purchase was
made to protect another patent (Patent B) that the company had filed tor in January 2012 and
subsequently received.b. Purchased the rights to a novel by a bestselling novelist in exchange
for 10,000 shares or $10 par value common stock selling for $60 per share. The book is
expected to sell 1,500,000 copies over the next 3 years with no significant sales of the novel
expected beyond 3 years.c. Purchased the franchise to operate a terry service from the state
government for $10,000. A bridge has been planned to replace the ferry, and the bridge is
expected to be completed in 5 years. Brush hopes that the terry will continue as a tourist
attraction, but profits are expected to be only 20% of those earned before the bridge is
opened.d. Paid $28,000 of legal costs to successfully defend the patent acquired in Transaction
a.e. Paid a race car driver $50000 to have the Brush Company name prominently displayed on
the race car for 2 years.Required:1. Prepare the journal entries to record the preceding
transactions.2. Prepare the journal entries to record the amortization of intangible assets for
2016, if appropriate. Amortize over the legal life unless a better alternative is indicated.View
Solution:
Brush Company engaged in the following transactions at the beginning

ANSWER
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