Racer Company Acquired Patent Rights on January 1,2014,for $1,080,000 $31,2017$

(2) Analyze the Impact of the Adjusting Entry

Essay

Racer Company acquired patent rights on January 1,2014,for $1,080,000.The patent has a useful life equal to its legal life of 15 years.On January 2,2017,Racer successfully defended the patent in a lawsuit at a cost of $78,000.
Required
(1) Determine the patent amortization expense for the current year ended December $31,2017$ .

(2) Analyze the impact of the adjusting entry to recognize the amortization.