wiring, and wall coverings. These improvements are estimated to yleld benefits for 8 years. Diaz leases (does not ownj its store and has 5 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.

wiring, and wall coverings. These improvements are estimated to yleld benefits for 8 years. Diaz leases (does not ownj its store and has 5 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.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 63P

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

On January 1 of this year, Diaz Boutique pays $130,000 to modernize its store. Improvements Include new floors, cellings.
wiring, and wall coverings. These Improvements are estimated to yleld benefits for 8 years. Dlaz leases (does not own) Its
store and has 5 years remalning on the lease.
1. & 2. Prepare the Journal entry to record the cost of modernization and amortization at the end of this current year.
Vlew trannaction lst
Journal entry worksheet
Record the cost of modemization of the store for $130,000 cash.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Jan 01
Record entry
Clear entry
Vlew general Journal

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