On January 1, 2017, Ellis, Inc purchased a patent for $200,000 cash
Although the patent gives legal protection for 20 years, the patent is expected to be used for only 10 years. Journalize the amortization expense for 2017. Assume straight-line amortization.
What will be an ideal response
Amortization Expense—Patent 20,000
Patent 20,000 .Amortization expense = (Cost - Residual value) / Useful life
Amortization expense = $200,000 / 10 years = $20,000
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