7.50 points QS 10-12 Intangible assets and amortization LO P4 On January 4 of th

Question

7.50 points QS 10-12 Intangible assets and amortization LO P4 On January 4 of this year, Diaz Boutique incurs a $190,000 cost to modernize its store. Improvements include new floors, ceilings, wiring, and wall coverings. These improvements are estimated to yield benefits for 8 years. Diaz leases its store and has 5 years remaining on the lease. 1. Prepare the journal entry to record the cost of modernization and amortization at the end of this current year View transaction list Journal entry worksheet Record the cost of modernization of the store for $190,000 cash. Note: Enter debits before credits. Date General Journal Jan 04

Explanation / Answer

1Jan 04- leasehold improvements A/c Dr 190,000

to Cash                                190,000

Year End Amortization expense-leasehold improvements A/c Dr $38000

Accumulated amortization-leasehold improvements $38000

Explanation:.Amortization = $190,000 / 5-year-lease-term = $38,000 per year.

2. The Note will mature on 12th September

Calkculation

May 16

june 30

July 31

Augist 31

September 12

3. Cash A/c Dr 89000   

to Notes Payable A/c 89000

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