Journal entry to record the amortization


Mia-Tora Company purchased a fast-food restaurant for $1,400,000. The fair market values of the assets purchased were as follows. No liabilities were assumed.

Equipment $320,000
Land $200,000
Building $650,000
Franchise (5-year life) $100,000

A. Calculate the amount of goodwill purchased.

B. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.

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Accounting Basics: Journal entry to record the amortization
Reference No:- TGS066505

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