Question

milano gallery purchases the copyright on a painting for $210,000 on january 1. the copyright is good for 10 more years, after which the copyright will expire and anyone can make prints. the company plans to sell prints for 19 years. prepare entries to record the purchase of the copyright on january 1 and its annual amortization on december 31. view transaction list journal entry worksheet 1 2 record the purchase of the copyright on a painting for $210,000 cash. note: enter debits before credits. date general journal debit credit january 01

Explanation:

Step1: Record copyright purchase

When purchasing the copyright, the copyright - an intangible asset - is debited and cash is credited.

Date	General Journal	Debit	Credit
	Cash		$210,000$

Step2: Calculate annual amortization

The useful life of the copyright is 10 years. The annual amortization expense is calculated by dividing the cost of the copyright by its useful life. Annual amortization = $\frac{210000}{10}=21000$.

Date	General Journal	Debit	Credit
	Accumulated Amortization - Copyright		$21,000$

Answer:

Date	General Journal	Debit	Credit
	Cash		$210,000$
December 31	Amortization Expense - Copyright	$21,000$
	Accumulated Amortization - Copyright		$21,000$