Suppose Domino’s Pizza has a 10-year lease on space in a suburban shopping center. Near the end of the sixth year of the lease, Domino’s exercised its rights under the lease, removing walls and replacing floor coverings and lighting fixtures. Domino’s will not be able to remove these improvements at the end of the lease term. The cost of these improvements was $180,000. The useful life of the redesigned facilities of these improvements was predicted to be 12 years. What accounts would be affected by the $180,000 expenditure? What would be the annual amortization?
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