On January 1, 2015, Nickleback Ltd. purchased a patent from Soriato Corp. for $50,000 plus a $60,000, five-year note bearing interest at 8% payable annually. Upon maturity a single lump sum amount of $60,000 will be payable. The market-rate for a note of a similar risk and characteristics is 9%. Nickleback estimates that the patent will have a future life of twenty years. Nickleback follows ASPE.
Required: Prepare the journal entry for the patent purchase. (Hint: refer to chapter on long-term notes receivable.)