Amortization expense

Whispering Recording Company (WRC) acquired the following assets at the beginning of 2006:

1. The patent to manufacture a revolutionary compact disc. The purchase price was $2,300,000, and there are 16 years remaining in the legal life of the patent.

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2. The copyright to an album by the newest country western group, Best of the West. The total amount spent to obtain the copyright was $480,000. The album is expected to be produced for three years, but royalties from the album are expected to continue for 10 years.

3. The copyright to a music video by the hottest new female vocalist, Flamingo, was purchased by WRC for $1,000,000. The video is expected to be produced for two years. However, royalties from the video are expected to continue for six years.

Required:

A. Assuming WRC uses the straight-line method of amortization, determine the amortization expense for 2006 for each of these assets.

B. Give the journal entry to record the 2006 amortization expense for the patent.

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