On January 1,2016,Holbrook Company leased a building under a three-year operating lease.The annual rental payments are $68,000 on January 1,2016,the inception of the lease,and $50,000 January 1 of 2017 and 2018.Holbrook made structural modifications to the building costing $90,000 before occupying the building.The useful life of the building and the modifications is 30 years with no expected residual value.
Required:
Prepare the appropriate journal entries for Holbrook Company for 2016.Holbrook's fiscal year is the calendar year,and the company uses straight-line depreciation.

Question

Quizplus · Accepted Answer

The Answer of On January 1,2016,Holbrook Company leased a building under a three-year operating lease.The annual rental payments are $68,000 on January 1,2016,the inception of the lease,and $50,000 January 1 of 2017 and 2018.Holbrook made structural modifications to the building costing $90,000 before occupying the building.The useful life of the building and the modifications is 30 years with no expected residual value.
Required:
Prepare the appropriate journal entries for Holbrook Company for 2016.Holbrook's fiscal year is the calendar year,and the company uses straight-line depreciation.

On January 1,2016,Holbrook Company Leased a Building Under a Three-Year