Nelson company, organized in 2017, has these transactions related to intangible assets in that year: jan. 2 purchased a patent (5-year life) $325,000. apr. 1 goodwill purchased (indefinite life) $360,000. july 1 acquired a 9-year franchise; expiration date july 1, 2026, $720,000. sept. 1 research and development costs $185,000.
1. prepare the necessary entries to record these intangibles. all costs were for cash.
2. make the entries as of december 31, 2017, recording any necessary amortization.

Answer

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Explanation  

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the warrantie is called fitness for particular purpose.

Explanation:

Unless properly disclaimed in the contract, an implied warranty of fitness for particular purpose arises when: (1) the seller knows, or should know, buyer's purpose for the goods; and (2) the seller knows, or should know, that buyer is relying on seller to determine what the buyer needs for that purpose.