On May 10, 2015, Substantial Corporation spent $210,000 on a limited-life intangible asset. Its useful lifetime is 10 years. How much in total amortization expense should be recorded on the intangible asset by December 31, 2017

The total amortization expense that should be recognised is $56000

Explanation:

Since the asset has a useful life of 10 years the amortization will be over a 10 year period. The annual amortization is $21000 (210000/10). The amortization will be apportioned for the year of 2015 since the asset was acquired in May. Effectively held for 8 months. thus 21000 x 8/12 = $14000. 2016 and 2017 will yield full amortized amounts of $21000. The total amortization expense on the asset will be 21000x2 + 14000 = $56000.