1. Vinson Company purchased a patent for $180,000 at the beginning of Year8, and estimated that its expected useful life was 5 years from the purchase date. The patent has a legal life of 20 years. What amount should be recorded as amortization expense for the patent in Year8?
a. $9,000 b. $36,000 c. $18,000 d. $180,000 e. $72,000
2. Lerner Inc. issued bonds several years ago for more than face value. The bonds had a face value of $100,000 and pay interest annually at 9% on 12/31 each year. The market rate on the date of issue was 8%. Assume the carrying value of the bonds throughout 20X2 is 104,000. Lerner prepares annual financial statements at 12/31 each year. How much interest expense will Lerner recognize in 20X2 related to these bonds?
A. $9,000 B. $8,000 C. $9,360 D. $8,320