Phoenix Agency Leases Office Space for $7,000 Per Month

Multiple Choice

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.

A) $20,000.
B) $6,000.
C) $13,000.
D) $65,000.
E) $8,125.