Monte Ray Leases Office Space for $7,000 Per Month

Monte Ray leases office space for $7,000 per month. On January 3, Monte Ray incurs $75,000 to improve his leased office space. These improvements are expected to yield benefits for 8 years. Ray has 6 years remaining on his lease. What journal entry would be needed to record the expense for the first year related to the improvements?

A) Debit Amortization Expense $12,500; credit Accumulated Amortization $12,500.
B) Debit Depletion Expense $12,500; credit Accumulated Depletion $12,500.
C) Debit Depreciation Expense $12,500; credit Accumulated Depreciation $12,500.
D) Debit Depletion Expense $9,375; credit Accumulated Depletion $9,375.
E) Debit Amortization Expense $9,375; credit Accumulated Amortization $9,375.