On January 1 of this year, a company pays $165,000 cash to modernize its store with new flooring, internet wiring, and wall fixtures. These improvements are estimated to yield benefits for 10 years. The company leases (does not own) its store and has 8 years remaining on the lease. 1. & 2. Prepare the entry to record its cash payment for the leasehold improvements and the December 31 year-end entry to amortize the leasehold improvements. View transaction list Journal entry worksheet < 1 2 Record the cost of modernization of the store for $165,000 cash. >

Vishnu

Jelly Co. processes jam and sells it to the public. Jelly leases equipment used in its production processes from Squishy, Inc. This year, Jelly leases a new piece of equipment from Squishy. The lease term is 5 years and requires equal rental payments of $15,000 at the beginning of each year. In addition, there is a renewal option to allow Jelly to keep the equipment one extra year for a payment at the end of the fifth year of $10,000 (which Jelly is reasonably certain it will exercise). The equipment has a fair value at the commencement of the lease of $76,024 and an estimated useful life of 7 years. Squishy set the annual rental to earn a rate of return of 5%, and this fact is known to Jelly. The lease does not transfer title, does not contain a bargain purchase option, and the equipment is not of a specialized nature. Which of the 5 lease tests does the lease qualify as a finance lease for? Choose all that apply. Transfer of Ownership Test [Select ] Bargain Purchase Option Test […

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.