Taylor,a Cash Basis Architect,rents the Building in Which His Office

question 120

Essay

Taylor,a cash basis architect,rents the building in which his office is located for $5,000 per month.He commenced his practice on February 1,2015.In order to guarantee no rent increases during an 18-month period,he signed an 18-month lease and prepaid the $90,000 on February 1,2015.How much can Taylor deduct as rent expense for 2015?

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Definitions:

Capitalism

An economic system characterized by private ownership of the means of production and the creation of goods or services for profit.

Entrepreneurship

The process of designing, launching, and running a new business or enterprise, particularly one that is characterized by innovation and risk.

Physical Facilities

The buildings, spaces, and related equipment owned or leased by an organization to support its operations.

Capital

Financial resources or assets owned by an individual or organization, used for investment, production, or other economic purposes.