accounting entry of trademark right for financing purchase
Debit: intangible assets (present value) (unpaid principal)
Unconfirmed financing expenses (backward extrusion) (unpaid interest)
Loan: long-term payables (annual payment × years)
Debit: long-term payables
Loan: bank deposit
. The difference between the actual payment price and the present value of the purchase price is regarded as unconfirmed financing expense, which should be amortized by the effective interest rate method during the payment period. The amortized amount should be included in the current profit and loss during the credit period, except that it meets the capitalization conditions of borrowing expenses and should be included in the cost of intangible assets.
what is intangible assets?
intangible assets refer to identifiable non-monetary assets without physical form. Intangible assets can be divided into broad sense and narrow sense. The broad sense of intangible assets includes financial assets, long-term equity investment, patent rights, trademark rights, etc. Because they have no physical entities, they are manifested as some legal rights or technologies. However, intangible assets are usually understood in a narrow sense in accounting, that is, patent rights and trademark rights are called intangible assets.
what are the long-term payables?
Long-term accounts payable refer to various other long-term accounts payable except long-term loans and bonds payable by enterprises, including rental fees payable for financing leased fixed assets and accounts payable for purchasing fixed assets by installment.
what is the unconfirmed financing fee?
The contents reflected in the unconfirmed financing expense account are unrealized financing expenses incurred in financing leased assets (such as fixed assets and intangible assets) or long-term loans, which should be shared during the lease period. From another perspective, we can understand it as the sharing of interest expenses due to financing during the lease period.