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Crestfield leases office space. On January 3, the company incurs $12,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 4 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements

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Answer:

Debit Amortization Expense $3,000; credit Accumulated Amortization $3,000.

Explanation:

Based on the information given the appropiate journal entry that would be needed to record the expense for the first year related to the improvements will be

Debit Amortization Expense $3000

Credit Accumulated Amortization-Leasehold Improvements $3000

(Amortization Expense = 12000/4 = $3000)

(To record the expense for the first year)