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. Note: Enter debits before credits. Date January 01 General Journal Debit Credit >

On January 1 of this year, Diaz Boutique pays $185,000 to modernize its store. Improvements include new floors, ceilings, wiring, and wall coverings. These improvements are estimated to yield benefits for 10 years. Diaz leases (does not own) its store and has 8 years remaining on the lease. 1. & 2. Prepare the journal entry to record the cost of modernization and amortization at the end of this current year. No 1 Date January 01 Leasehold improvements Cash 2 December 31 Answer is complete but not entirely correct. General Journal Debit 185,000 Credit 185,000 Amortization expense-Leasehold improvements Cash 30 185,000 185,000

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?

Miriam Corp. began leasing retail space at Oberlin Village in Raleigh, NC, on December 1, 2022. Before opening its new store, Miriam spent $7,000 on special lighting for the store. The lease term is ten (10) years, and the special lighting has an economic life of five (5) years. Which statement shows the correct accounting treatment for the new lighting in 2022? Miriam should debit its “Leasehold Improvements” account for $7,000 and depreciate the lighting over the lease term of ten (10) years. Miriam should debit its “Repairs and Maintenance Expense” account by $7,000. Miriam should debit its “Cost of Goods Sold” account by $7,000. Miriam should debit its “Leasehold Improvements” account for $7,000 but should not depreciate the lighting. Miriam should debit its “Leasehold Improvements” account for $7,000 and depreciate the lighting over its economic life of five (5) years.

Blossom, Inc. has entered an agreement to lease an old warehouse with a useful life of 5 years and a fair value of $25,000 from Crane Corporation. The agreement stipulates the following. Rental payments of $5,599 are to be made at the start of each year of the 5-year lease. No residual value is expected at the end of the lease. Blossom must reimburse Crane each year for any real estate taxes incurred for the year. Last year, the cost of real estate taxes was $700, though these costs vary from year to year. Blossom must make a payment of $500 with the rental payment each period to cover the insurance Crane has on the warehouse. Blossom paid legal fees of $1,000 in executing the lease. Assuming Blossom's incremental borrowing rate is 6% and the rate implicit in the lease is unknown, prepare the journal entry to record the initial lease liability and right-of-use asset for Blossom. (List all debit entries before credit entries. Credit account titles are automatically indented when the…

On January 1, 2016, Bise Company signed an eight-year lease for office space. The entity has the option to renew the lease for an additional six-year period on or before January 1, 2022. In early part of 2018, the entity incurred the following costs: Improvements to the leased premises with useful life of 10 years, P5,400,000 Office furniture and equipment with useful life of 8 years, P2,400,000 Moveable assembly line equipment with useful life of 5 years, P1,800,000 On December 31, 2018, Bise’s intention as to the exercise of the renewal option is uncertain. A full depreciation of leasehold improvements is taken in the year of acquisition. On December 31, 2018, what amount of accumulated depreciation of leasehold improvements should be reported?

Windsor, Inc. has entered an agreement to lease an old warehouse with a useful life of 5 years and a fair value of $41,000 from United Corporation. The agreement stipulates the following. . Rental payments of $9,994 are to be made at the start of each year of the 5-year lease. No residual value is expected at the end of the lease. Windsor must reimburse United each year for any real estate taxes incurred for the year. Last year, the cost of real estate taxes was $800, though these costs vary from year to year. Windsor must make a payment of $500 with the rental payment each period to cover the insurance United has on the warehouse. Windsor paid legal fees of $2,500 in executing the lease. Assuming Windsor's incremental borrowing rate is 11% and the rate implicit in the lease is unknown, prepare the journal entry to record the initial lease liability and right-of-use asset for Windsor.

Ivanhoe Company specializes in leasing large storage units to other businesses. Ivanhoe entered a contract to lease a storage unit to Cullumber, Inc. for 4 years when that particular storage unit had a remaining useful life of 5 years. The fair value of the unit was $32,000 at the commencement of the lease on January 1, 2025. The present value of the five equal rental payments of $8,250 at the start of each year, plus the present value of a guaranteed residual value of $1,000, equals the fair value of $32,000, Ivanhoe's implicit rate of return on the lease of 4%. The following is a correct, complete amortization schedule created by Ivanhoe. Date 1/1/25 1/1/25 1/1/26 1/1/27 1/1/28 12/31/28 Lease Payment $8,250 8,250 8,250 8,250 1,000 $34,000 Interest (4%) on Outstanding Lease Receivable (To record accrual of interest) $950 658 354 38 $2,000 Reduction of Lease Receivable $8,250 7,300 7,592 7,896 962 $32,000 Balance of Lease Receivable $32,000 23,750 16,450 8,858 962 0 Given the above…

Forrest, Inc. has entered an agreement to lease an old warehouse with a useful life of 5 years and a fair value of $20,000 from United Corporation. The agreement stipulates the following. Rental payments of $4,638 are to be made at the start of each year of the 5-year lease. No residual value is expected at the end of the lease. Forrest must reimburse United each year for any real estate taxes incurred for the year. Last year, the cost of real estate taxes was $700, though these costs vary from year to year. Forrest must make a payment of $500 with the rental payment each period to cover the insurance United has on the warehouse. Forrest paid legal fees of $1,000 in executing the lease. Assuming Forrest's incremental borrowing rate is 8% and the rate implicit in the lease is unknown, prepare the journal entry to record the initial lease liability and right-of-use asset for Forrest.