On January 1, 2019, Amaya company signed a 12 year lease for warehouse space. The entity has an option to renew the lease for an additional 8-year period on or before January 1, 2022. During January 2021, the entity made substantial improvement to the warehouse. The cost of the improvement was 972,000 with an estimated useful life of 15 years. On December 31, 2021, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2021. On December 31, 2021, what is the carrying amount of the leasehold improvement?
On January 1, 2019, Amaya company signed a 12 year lease for warehouse space. The entity has an option to renew the lease for an additional 8-year period on or before January 1, 2022. During January 2021, the entity made substantial improvement to the warehouse. The cost of the improvement was 972,000 with an estimated useful life of 15 years. On December 31, 2021, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2021. On December 31, 2021, what is the carrying amount of the leasehold improvement?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. On January 1, 2019, Amaya company signed a 12 year lease for warehouse space. The entity has an option to renew the lease for an additional 8-year period on or before January 1, 2022.
During January 2021, the entity made substantial improvement to the warehouse. The cost of the improvement was 972,000 with an estimated useful life of 15 years.
On December 31, 2021, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2021.
On December 31, 2021, what is the carrying amount of the leasehold improvement?
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