Asset recognition and valuation. The transactions below relate to Office Depot, an office supply retailer. Indicate whether or not each transaction immediately gives rise to an asset under GAAP. If accounting recognizes an asset, state the account title, the amount, and the classifica- tion of the asset on the balance sheet as either a current asset or a noncurrent asset.

a. The firm rents retail space in a local shopping center for the five-year period beginning next month. Office Depot pays $255,000, which includes $125,000 as rent for the first year and $130,000 as a security deposit against future damages and unpaid rent. The firm commits to paying $500,000 later, for the last four years of the lease.

b. The firm spends $10,000 to install partitions between administrative and retail space.

$6,500 to paint the walls colors that are consistent with other Office Depot stores, and

$20,000 to install carpeting.

c. The firm purchases display counters with a list price of $30,000. It pays for the display counters in time to take a 2 percent discount for prompt payment. Costs to transport the display counters to the new location total $1,200, and costs to install them total $800.

d. The firm hires a store manager at an annual salary of $60,000.

e. The firm spends $1,500 in newspaper and television advertisements that appeared this month.

f. The firm purchases inventory with an invoice price of $ 1 60.000. It pays for merchandise with an original invoice price of $120,000 in time to take a 2 percent discount for prompt payment. It has not yet paid for the remainder of the merchandise purchased. The firm treats cash discounts taken as a reduction in the acquisition cost of merchandise. An inspection of the merchandise reveals that merchandise with an original invoice price of

$12,000 is defective. Office Depot returns this merchandise to the supplier, having not yet paid for it.