On January 2, 2006, Ral Co. leased land and building from an unrelated lessor for a ten-year term. The lease has a renewal option for an additional ten years, but Ral has not reached a decision with regard to the renewal option. In early January of 2006, Ral completed the following improvements to the property:
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|
Description |
Estimated life |
Cost |
|
Sales office |
10 years |
$47,000 |
|
Warehouse |
25 years |
75,000 |
|
Parking lot |
15 years |
18,000 |
Amortization of leasehold improvements for 2006 should be
- $ 7,000
- $ 8,900
- $12,200
- $14,000