Mayfield's is a new carry out restaurant that began operations in April 2022. Mayfield's is privately held. During March 2022 Mayfield's spent $200,000 on constructing the restaurant/carryout space plus hiring and training of the new employees. The company is classifying these expenditures as start-up expenditures.

The CEO of Mayfield's believes that the $200,000 of start-up expenditures should be recognized as an asset since the expenditures will benefit the future operations of the company for many years. The company recognized these expenditures as follows:

3/31/2022 Start Up Costs (an asset) 200,000

Cash 200,000

Accounting Issue: Is Mayfield's correctly recognizing the $200,000 of start-up costs?

1. Codification Reference:

2. Your answer/interpretation of the guidance:

Is Mayfield's correctly recognizing the $200,000 of start-up costs?

1. Yes
2. No

1. If necessary, prepare a journal entry. If a journal entry is not required indicate N/A.

Date	Account Name	Debit	Credit