BA220 Financial Accounting: P8-3A Mia-Tora Company purchased a fast-food restaurant

BA220 Financial Accounting

Problem 8-3A ACCOUNTING FOR INTANGIBLE ASSETS
Mia-Tora Company purchased a fast food restaurant for $1,4000,000. The fair market values of the assets purchased were as follows. No liabilities were assumed. (Goodwill Purchased: $130,000)
Equipment: $320,000
Land: $200,000
Building: $650,000
Franchise (5 year life) $100,000
Required:
a. Calculate the amount of goodwill purchased.
b. Prepare a journal entry to record the amortization of the franchise fee at the end of year 1.
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