the davis research company engaged in the following six transact 254124

The Davis Research Company engaged in the following six transactions during 2007:

1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred.

2. Costs of improving patent:

Engineering costs …………………. $20,000

Assembling and testing prototypes … 10,000

Other R&D costs …………………… 25,000

3. Sold a prototype machine for $7,000. The research and development were performed in previous years.

4. Licensed a manufacturing process to another company and received $80,000 as an advance payment.

5. Successfully defended a patent infringement suit at a cost of $12,000.

6. Earned $5,000 of the advance payment on the licensed manufacturing process in Item 4.

Required

Prepare journal entries to record the preceding transactions.

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