Problem
In 2010, George Winston Corporation spent $170,760 on research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2010, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $38,760 related to the patent were incurred as of October 1, 2010.
1. Submit all journal entries required in 2010 and 2011 as a result of the transactions above.
2. On June 1, 2012, Winston spent $12,800 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2012. Submit all journal entries required in 2012 and 2013.