Compute the amount of expense that should be recorded the, Accounting Basics

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Compute the amount of expense that should be recorded the

Phoenix Agency leases office space for $7,000 per month. On January 3, Phoenix incurs $65,000 to improve the leased office space. These improvements are expected to yield benefits for 8 years. Phoenix has 5 years remaining on its lease. Compute the amount of expense that should be recorded the first year related to the improvements.

$8,125.
$13,000.
$6,000.
$65,000.
$20,000.

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