Intermediate Accounting: P10-4 The Hostmeyer Corporation commenced operations

Intermediate Accounting 
The Hostmeyer Corporation commenced operations early in 2011. A number of expenditures were made during 2011 that were debited to one account called intangible assets. A recap of the $644,000 balance in this account at the end of 2011 is as follows: 
Date Transaction Amount
2/3/2011 State incorporation fees and legal costs related to organizing the corporation 7,000 
3/1/2011 Fire insurance premium for three-year period 6,000 
3/15/2011 Purchased a copyright 20,000 
4/30/2011 Research and development costs 40,000 
6/15/2011 Legal fees for filing a patent on a new product resulting from an R&D project 3,000 
9/30/2011 Legal fee for successful defense of patent developed above 12,000 
1/13/2011 Enteres into a 10-year franchise agreement with franchisor 40,000 
Various Advertising costs 16,000 
11/30/2011 Purchase of all of the outstanding common stock of Stiltz Corp. 500,000 
Total $644,000 

The toal purchase price of the Stiltz Corp. stock was debited to this account the fair values of Stiltz Corp.'s assets and liabilities on the date of the purchase were as follows: 
Receivables 100,000 
Equipment 350,000 
Patent 150,000 
Total assets 600,000 
Note payable assumed (220,000)
Fair value of net assets $380,000 

Prepared the necessary journal entries to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions.
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