In October 2023, ABC Corp enters into negotiations with XYZ Corp to lease commercial property. ABC pays G, its outside legal counsel, $4,000 in October 2023 for services rendered by G during December in assisting with negotiations with XYZ. In December 2023, ABC and XYZ finalize the terms of the lease and execute the lease agreement. ABC pays H, another of its outside legal counsel, $2,000 in December 2023 for services rendered by H during December in drafting the lease agreement. The agreement between ABC and XYZ is an agreement providing ABC the right to use property and is required to be capitalized. When available, ABC Corp utilizes the simplifying convention for transaction costs in Regulation 1. 263(a)-4. 

What amount of legal costs is required to be capitalized by ABC?

Answer rating: 100% (QA)

Under US GAAP Generally Accepted Accounting Principles legal costs associated with acquiring or defe... View the full answer