On July 1st, 2012, Falk Company signed a contract to lease space in a building for 15 years. The lease contact Calls for annual (prepard) rental payments of $80,000 on each July 1st throughout the life of the lease and for the lessee to pay for all additions and improvements to the leased prorrextes property on June 25, 2013, talk, decides to Sublease the space to Ryan and Associates for the remaining 10 years of the lease - Ryan pays. 131 200,000 to Falk for the right to sublease and it agrees ne the obligation to pay the $80,000 annual rent to the building owner beginning July 1, 2017. After taking possession of the leased space, Ryan pays for improving the office portion of the leased space at a $130,000 cost.. The improvements are paid bar by Ryan on July 5, 2017 and are estimated to have a useful life equal to the 16 years remaining in the life of the building. 1. Prepare the entries for Ryan to record (as its payment to Falk for the right to sublease the building space, (b.) its payment of the 2017 annual rent to the building owner, and (c.) its payment for the office improvements - June 25: Record the sublease for $200,000 cash - Jorme July 1: Record the annual lease rental of $80,000 cush - July s Record the costs of leasehold improvements of $130,000 cash 12. at cost and Prepare Ryan's year-end adjusting entries required December 31, 2012, to (a.) amortize the $200,000 of the sublease (b.) amortize the office improvements, (c.) record pent expense - Dec 31 Record the year-end adjusting entry for the amortization expense of the leasehold - Dec 31 Record the year-end adjusting entry for the amortization expense of the leark hold improvements - Dec 31: Record the year-end adjusting entry for the rent expense 1.) Prepare entries for Ryan to record: a.) its payment to Falk for the right to sublease the building space b.) its payment of the 2017 annual rent to the building owner c.) its payment for the office improvements 1.) Record the sublease for $200,000 cash. | General Journal Debit YAPPA Date | June 25 12. Record the annual lease rental of $80,000 cash Date General Journal Debit Credit 3.) Record the costs of leasehold improvements of $ 130,000 cash Date General & Journal Debit Credit Julys ATA required Prepare Ryan's year-end at December 31, 2017 adjusting entries to: subleuse a.) amortize the si200,000 costs of the b.) amortize the office improvements c.) record rent expense for the amort- 1. Record the year-end adjusting entry ization expense of the leasehold General Journal Debit Credit Date Dec 31 2.) Record the year-end amortization expense adjusting of the entry for leasehold the improvements I General Journal Debit Crelit Date Dec 31 3.) Record the year-end adjusting the rent expense entry for General Journal Debit Credik Date Deo 31
