Amortization Expense Accounting Problem.?

[cinnard]

Greenleaf Company acquired patent rights on January 6, 2009, for $300,000. The patent has a useful life equal to its legal life of 12 years. On January 3, 2012, Greenleaf successfully defended the patent in a lawsuit at a cost of $72,000.


a. Determine the patent amortization expense for the current year ended December 31, 2012
b. Journalize the entry

Please help explain. thank you

[kendell]

The cost of successfully defending a patent is added to the original cost, and amortized over the remaining useful life. Amortization Expense for 2012 would be:
Original Cost $300,000
Defense Cost $72,000
Total $372,000
Remaining useful life as of January 3, 2012: 9 years
Amoritzation Expense $372,000 / 9 = $41,333

Debit Amortization Expense $41,333
Credit Patent $41,333