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Reichenbach Co., organized in 2009, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2009 and 2010. Intangible Assets 7/1/09 8-year franchise; expiration date 6/30/17 $ 48,000 10/1/09 Advance payment on laboratory space (2-year lease) 24,000 12/31/09 Net loss for 2009 including state incorporation fee, $1,000, and related legal fees of organizing, $5,000 (all fees incurred in 2009) 16,000 1/2/10 Patent purchased (10-year life) 84,000 3/1/10 Cost of developing a secret formula (indefinite life) 75,000 4/1/10 Goodwill purchased (indefinite life) 278,400 6/1/10 Legal fee for successful defense of patent purchased above 12,650 9/1/10 Research and development costs 160,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2010, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore income tax effects.) (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.) Account/Description Debit Credit GoodwillRent expensePrepaid rentRetained earnings(Organization costs)Research & development expenseFranchise amortization expensePatent amortization expenseRetained earningsIntangible assetsPatentsFranchises Retained earningsPrepaid rentGoodwillPatent amortization expenseRetained earnings(Organization costs)PatentsIntangible assetsFranchise amortization expenseResearch & development expenseRent expenseFranchises Rent expensePatentsResearch & development expenseFranchisesRetained earnings(Organization costs)GoodwillPatent amortization expensePrepaid rentIntangible assetsFranchise amortization expenseRetained earnings Retained earnings(Organization costs)Franchise amortization expenseFranchisesPatentsIntangible assetsRent expenseResearch & development expenseGoodwillPrepaid rentPatent amortization expenseRetained earnings Prepaid rentGoodwillRetained earningsRetained earnings(Organization costs)Franchise amortization expenseRent expensePatent amortization expenseIntangible assetsResearch & development expenseFranchisesPatents FranchisesRent expenseRetained earningsFranchise amortization expensePatentsGoodwillRetained earnings(Organization costs)Intangible assetsPatent amortization expenseResearch & development expensePrepaid rent Prepaid rentRetained earnings(Organization costs)Franchise amortization expenseRetained earningsGoodwillFranchisesPatentsRent expensePatent amortization expenseIntangible assetsResearch & development expense Intangible assetsRetained earningsPatentsResearch & development expenseGoodwillRent expenseFranchise amortization expenseRetained earnings(Organization costs)Prepaid rentFranchisesPatent amortization expense (To clear out the intangible asset account) Prepaid rentPatentsFranchisesPatent amortization expenseGoodwillFranchise amortization expenseRetained earningsRent expenseIntangible assetsResearch & development expenseRetained earnings(Organization costs) PatentsRetained earningsRent expensePatent amortization expenseFranchise amortization expenseIntangible assetsGoodwillResearch & development expenseRetained earnings(Organization costs)Prepaid rentFranchises FranchisesRetained earningsPrepaid rentRetained earnings(Organization costs)PatentsGoodwillRent expensePatent amortization expenseFranchise amortization expenseIntangible assetsResearch & development expense (To establish accounts associated with franchises) Intangible assetsFranchisesGoodwillFranchise amortization expenseRetained earningsResearch & development expensePatent amortization expensePatentsRent expensePrepaid rentRetained earnings(Organization costs) Patent amortization expenseIntangible assetsRetained earningsRent expenseFranchise amortization expenseRetained earnings(Organization costs)GoodwillPrepaid rentResearch & development expenseFranchisesPatents PatentsGoodwillRetained earningsFranchise amortization expensePatent amortization expenseRetained earnings(Organization costs)FranchisesRent expenseIntangible assetsResearch & development expensePrepaid rent (To establish accounts associated with rent) Patent amortization expenseResearch & development expensePrepaid rentFranchisesPatentsRent expenseFranchise amortization expenseGoodwillIntangible assetsRetained earnings(Organization costs)Retained earnings Patent amortization expenseIntangible assetsPatentsPrepaid rentResearch & development expenseRetained earnings(Organization costs)Retained earningsFranchise amortization expenseFranchisesGoodwillRent expense (To establish accounts associated with patents)

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