Unformatted text preview: +E, –SE) 10,000 Cash (–A)
= Liabilities + Cash –10,000 LO 2 Stockholders’ Equity Rent expense (+E) –10,000 S E-2 Depreciating leasehold improvements
At the beginning of its first fiscal quarter, Caribou Coffee signed a 5-year lease for
retail space in the Ithaca Mall. Before opening the space, Caribou made various
leasehold improvements, one of which was to build a new coffee counter where
customers can watch baristas make their espresso drinks. The cost to build the
coffee counter was $12,500, which Caribou paid with cash. The counter is
expected to provide benefits for the duration of the lease. Caribou depreciates
equipment on a quarterly basis using the straight-line method of depreciation.
Prepare the journal entry to record the depreciation of the coffee counter at the
end of the first quarter. Assume that Caribou take a full quarter of depreciation
during the first quarter.
Depreciation expense (+E, –SE) 625 ($12,500 / 20 quarters) Accumulated depreciation (+XA, –A)
Assets = Liabilities 625
+ Accumulated depreciation (+XA) –625 LO 1
LO 3 Stockholders’ Equity
Depreciation expense (+E) –625 S E-3 Depreciating and amortizing lease assets and liabilities
On January 1, 2010, Google Corporation leases a package of high-speed servers
by signing a 5-year capital lease. Lease paym...
View Full Document
- Spring '12
- Balance Sheet, Deferred tax, Generally Accepted Accounting Principles, Income tax in the United States