What is the journal entry to record the cost of an intangible asset?
When a company purchases or acquirers an intangible asset, they can capitalize the cost of that asset on the balance sheet. The initial entry would be to debit intangible assets for the addition of the asset, and then credit cash for the cash outflow related to the purchase.
Assuming it is a finite life asset, the asset should be amortized over its useful life. The entry to record amortization expense is a debit to amortize expense and a credit to accumulated amortization.
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What are the different types of intangible assets?
Intangibles are considered long-lived assets that are not physical in nature or lack physical substance but are used throughout the ordinary course of business activities. Intangible assets are either identifiable intangible assets or unidentifiable. The only unidentifiable intangible asset that you will need to know is goodwill. Some examples of both identifiable and unidentifiable intangible […]