Sunshine Corp. began leasing retail space at Mall on November 1, 2021. Before opening its new store, Sunshine spent $8,000 on special lighting for the store. The lease term is eight (8) years, and the special lighting has an economic life of five (5) years.

Which of the following statements shows the correct accounting treatment for the new lighting in 2021?

1. Sunshine should debit its Leasehold Improvements account for $8,000 but should not depreciate the lighting.
2. Sunshine should debit its Leasehold Improvements account for $8,000 and depreciate the lighting over its economic life of five (5) years.
3. Sunshine should debit its Leasehold Improvements account for $8,000 and depreciate the lighting over the lease term of eight (8) years.
4. Sunshine should debit its Repairs and Maintenance Expense account by the full $8,000.
5. Sunshine should debit its Cost of Goods Sold account by the full $8,000.