On December 31, it was estimated that goodwill of $65,000 was impaired. On July 1, a patent with an estimated useful economic life of 10 years was acquired for $60,000.
(a)Journalize the adjusting entry on December 31 for the impaired goodwill.
(b)Journalize the adjusting entry on December 31 for the amortization of the patent rights.

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Johanathan Roberts · Accepted Answer

Final Answer :  (a)    Loss from Impaired Goodwill  65 , 000  Goodwill  65 , 000 \begin{array} { | c | r | r | } \hline 	ext { Loss from Impaired Goodwill }  &  65,000  &  \\hline 	ext { Goodwill }  &   &  65,000 \\hline\end{array}  Loss from Impaired Goodwill   Goodwill  ​ 65 , 000 ​ 65 , 000 ​ ​ (b)   Amortization Expense-Patents  3 , 000  Patents  3 , 000 \begin{array} { | c | r | r | } \hline 	ext { Amortization Expense-Patents }  &  3,000  &  \\hline 	ext { Patents }  &   &  3,000 \\hline\end{array}  Amortization Expense-Patents   Patents  ​ 3 , 000 ​ 3 , 000 ​ ​ Annual Patent Amortization = Acquisition Cost/Useful Life = $60,000/10 = $6,000 Amortization expense from July 1 to December 31 = $6,000/2 = $3,000

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