Starbucks Coffee Company is a leading retailer of specialty coffee with more than 16,000 coffee shops worldwide. Assume that Starbucks planned to open a new store on St. George Street near the University of Toronto and obtained a 15 -year lease starting January 1, 2012. Although a serviceable building was on the property, the company had to build an additional structure for storage. The 15 -year lease required an \(\$ 18,000\) cash advance payment plus cash payments of \(\$ 5,000\) per month during occupancy. During January 2012, the company spent \(\$ 90,000\) cash building the structure. The new structure has an estimated life of 18 years with no residual value.

Required:

1. Prepare the journal entries for the company to record the payment of the \(\$ 18,000\) advance on January 1,2012 , and the first monthly rental.

2. Prepare the journal entry to record the construction of the new structure.

3. Prepare any adjusting entries required at December 31,2012 , the end of the company's fiscal year, with respect to

(a) the advance payment and

(b) the new structure. Assume that straight-line depreciation is used. Show computations.
4. Compute the total expense resulting from the lease for 2012.