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Answer rent expense e se 10000 cash a assets 10000

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Unformatted text preview: +E, –SE) 10,000 Cash (–A) Assets 10,000 = 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. ANSWER 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...
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