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Medway printers manufacture printers assume that mp recently. paid $900,000 for a patent on a new laser printer although it gives legal protection for 20 years the patent is expected to provide a competitive Advantage for only 8 years.
Assuming the straight line method of amortization .make journal entries to record the purchase of the patent and amortization for the first full year.
After after using the patent for four years MP learns at an industry trade show that another company is designing a more efficient printer on the basis of this new information MP decides starting with year 5 to amortize the remaining cost of the patent over two remaining years given the patent a total useful life of 6 years record amortization for 5 years.
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