Trademarks and Trade Names
Definition: Brand identifiers; indefinite if renewed
Scope:ModerateDifficulty:Easy
Brand identifiers; indefinite if renewed
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Acquire trademark | ||
| Purchase trademark for $25,000. | ||
| TrademarksAsset+ | $25,000 | |
| CashAsset− | $25,000 | |
| Indefinite life—not amortized, tested for impairment. | ||
| 2. Legal defense costs | ||
| Spend $5,000 defending the trademark. | ||
| TrademarksAsset+ | $5,000 | |
| CashAsset− | $5,000 | |
| Successful defense costs are capitalized. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
TrademarksTrademarksAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$25,000.00
$5,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$30,000.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$25,000.00
$5,000.00
$30,000.00
DurationLong-Term
External Links
- Trademark — Wikipedia