Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem 11.21BE
Leasehold Improvements. At the beginning of its fiscal year Beau Co. leased office space for a 20-year period. Prior to occupying the office, Beau needed to make renovations costing $750,000 with an expected useful life of 15 years. The renovations are to be recorded as leasehold improvements. Assuming that Beau uses the straight-line method, prepare the
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On January 2, year 1, Ral Co. leased land and building from an unrelated lessor for a ten-year term. The lease has a
renewal option for an additional ten years, but Ral has not reached a decision with regard to the renewal option. In early
January of year 1, Ral completed the following improvements to the property:
Sales Office
Estimated Life: 10 Years
Cost: $47,000
Warehouse
Estimated Life: 25 Years
Cost: $75,000
Parking Lot
Estimated Life: 15 Years
Cost: $18,000
Amortization of leasehold improvements for year 2 should be?
Inc. currently leases an office building. It initiated the original 23-year lease 17 years ago, so 6 years remain on the lease. On January 1, PP paid $28,500 to install a new heating and cooling system with a 12-year estimated useful life that it expects to use ratably over the remaining term of the lease. What is the journal entry to record the expenditure? How much amortization will PP report and for how many years? What is the journal entry for the first year?
50) Crestfield leases office space. On January 3, the company incurs $15,000 to improve the
leased office space. These improvements are expected to yield benefits for 10 years. Crestfield
has 5 years remaining on its lease. What journal entry would be needed to record the expense for
the first year related to the improvements?
A) Debit Amortization Expense-Leasehold Improvements $1,500; credit Accumulated
Amortization Leasehold Improvements $1,500.
B) Debit Depletion Expense $3,000; credit Accumulated Depletion $3,000.
C) Debit Depreciation Expense $1,500; credit Accumulated Depreciation $1,500.
D) Debit Depletion Expense $15,000; credit Accumulated Depletion $15,000.
E) Debit Amortization Expense-Leasehold Improvements $3,000; credit Accumulated
Amortization Leasehold Improvements $3,000.
Chapter 11 Solutions
Intermediate Accounting
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