ACCOUNTING FOR INTANGIBLE ASSETS
Blackford and Medford Publishing Company own the copyright on many top authors. In 2010, Blackford and Medford acquired the copyright on the literary works of Susan Monroe, an underground novelist in the 1960s, for $800,000 cash. Due to a recent resurgence of interest in the 1960s, the copyright has an estimated economic life of eight years. The residual value is estimated to be zero.
Required:
1. Prepare a journal entry to record the acquisition of the copyright.
2. Compute and record the 2010 amortization expense for the copyright.