Question: A lessee incurred costs to construct office space in a leased warehouse. The estimated useful life of the office is ten years. The remaining term

A lessee incurred costs to construct office space in a leased warehouse. The estimated useful life of the office is ten years. The remaining term of the nonrenewable lease is fifteen years. The costs should be

a. Capitalized as leasehold improvements and depreciated over fifteen years.

b. Capitalized as leasehold improvements and depreciated over ten years.

c. Capitalized as leasehold improvements and expensed in the year in which the lease expires.

d. Expensed as incurred.

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