(Answered) On june 1 2005 yum-yum signed a 15-year lease agreement and

Accounting

On June 1, 2005, Yum-Yum signed a 15-year lease agreement and opened a new restaurant downtown Victoria. The company has the obligation to remove certain equipment from the restaurant at the end of the lease term. Yum-yum has estimated the removal costs would be $12,000 at the end of 15 years. The company uses a discount rate of 10% for this type of obligation. The restaurant equipment was purchased for a total price of $114,000 including shipping and installation. The equipment account was debited $114,000 in total for the year.

Required: prepare all necessary adjusting journal entries for the year ended Dec, 31, 2005.

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