Crestfield Leases Office Space for $7,000 Per Month

question 138

Multiple Choice

Crestfield leases office space for $7,000 per month.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?

• A)Debit Amortization Expense $1,200;credit Accumulated Amortization $1,200.
• B)Debit Depletion Expense $3,000;credit Accumulated Depletion $3,000.
• C)Debit Depreciation Expense $1,200;credit Accumulated Depreciation $1,200.
• D)Debit Depletion Expense $12,000;credit Accumulated Depletion $12,000.
• E)Debit Amortization Expense $3,000;credit Accumulated Amortization $3,000.

Understand the basics of the accounting equation and its components.

Understand the concept of accounts receivable and its significance in business transactions.

Analyze the effects of various transactions on the accounting equation.

Identify the role of owner's withdrawals and their impact on owner's equity.

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Definitions:

Behavioral Education

An educational approach that focuses on teaching skills and behaviors through a system of rewards and consequences.

Consciousness Raising

An approach aimed at increasing awareness about oneself, one's problems, and the social factors influencing personal issues.

Counterconditioning

A behavior therapy technique where a maladaptive response is replaced with a more appropriate one through conditioning.

Generalization

The process by which a response is learned in one situation extends to different but similar situations, often discussed in the context of learning and behavior modification.