Question 3: On July 1, Year 1, Aidan Corporation purchased Johnson Company by paying $187,500 cash and issuing a $65,000 note payable to Steve Johnson. At July 1, Year 1, the balance sheet of Johnson Company was as follows: The recorded amounts all approximate current values except for land (worth $45,000 ), inventory (worth $93,750 ), and copyrig

Question

Question 3: On July 1, Year 1, Aidan Corporation purchased Johnson Company by paying

$187,500

cash and issuing a

$65,000

note payable to Steve Johnson. At July 1, Year 1, the balance sheet of Johnson Company was as follows: The recorded amounts all approximate current values except for land (worth

$45,000

), inventory (worth

$93,750

), and copyrights (worth

$11,250

). Instructions (a) Prepare the July 1 entry for Aidan Corporation to record the purchase. (b) Prepare the December 31 entry for Aidan Corporation to record amortization of intangibles. The copyrights have an estimated useful life of 4 years with a residual value of

$2,450

.

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