Crestfield leases office space. On January 3, the company incurs $12,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 4 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?
A. Debit Amortization Expense $3,000; credit Accumulated Amortization-Leasehold Improvements $3,000.
B. Debit Amortization Expense $1,200; credit Accumulated Amortization-Leasehold Improvements $1,200.
C. Debit Depletion Expense $12,000; credit Accumulated Depletion $12,000.
D. Debit Depreciation Expense $1,200; credit Accumulated Depreciation $1,200.
E. Debit Depletion Expense $3,000; credit Accumulated Depletion $3,000.
Answer: A
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