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question byrd corporation engaged in the following transactions at the beginning of 4286645

Question

Byrd Corporation engaged in the following transactions at the beginning of 2016:

Required:

Prepare journal entries to record the 2016 transactions for the franchise. Assume the purchase was made on January 1, 2016.

PAGE 1

GENERAL JOURNAL

1

2

3

Adjusting Entries

4

5

Prepare journal entries to record the 2016 transactions related to the trade name. Additional Instructions

How should Byrd account for the copyright discussed in transaction e?

a.

Purchased a Hogburger franchise for a 5-year, $60,000, 10% interest-bearing note. The franchise has an indefinite life providing the terms of the franchise are not violated.

b.

Sold a trade name for $50,000. The trade name had a carrying value of $5,000.

c.

Paid an advertising agency $60,000 for advertisements to promote a new trade name. The advertisements will begin in 2017.

d.

Incurred legal fees of $5,000 to register a new trade name.

e.

Purchased the copyright to a new movie for $500,000. The movie is made during 2016 at a cost of $15 million. It will begin showing in 2017 and is expected to gross $10 million during 2017, $20 million during 2018, and $10 million during 2019.

 

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