What is Amortization Expense
It is the cost of an Intangible No n Current Asset charged to expense during the Current Accounting Period. It is recorded as an Expense and closed by transferring to Income Statement at the end of Accounting Period. Amortization Expense Account is prepared for recording Adjusting Journal Entry during the Accounting Period. Example: Suppose A company acquired Patent at the cost of Rs. 50000. Currently, the company is adopting Straight Line Method for Amortization . The estimated useful life of Patent is 5 years then Amortization on Patent for the year is (50000/5) Rs. 10000. The Accounting Journal Entry is recorded in the Journal of business as follows: Amortization Expense Journal Entry Amortization Expense a/c - Patent 10000 ...