RST leased equipment from MNO to be used in its warehouse.The lease term is five years.RST spent $5,000 for ordinary repairs during the second year of the lease.RST should:

Question

Quizplus · Accepted Answer

Expenses for ordinary repairs, such as the $5,000 spent by RST, are typically expensed immediately rather than capitalized or amortized. These costs are considered part of the routine maintenance required to keep the leased equipment in working order and do not extend the useful life of the asset or improve its value, hence they are recognized as expenses in the period they are incurred.

RST Leased Equipment from MNO to Be Used in Its