Marquardt Company signs a 5-year lease related to office space at an annual rental of £30,000. At the end of the second year, the company decides to close its operation in this part of country. Its lease is non-cancelable, and the penalty for non-payment is £62,000. The present value of future payments on the lease is estimated to be £81,000. The company does not believe that it can sublet these facilities. Explain how this transaction should be accounted for at December 31, 2015.

Prepare the journal entry to record this entry on December 31, 2015.

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Answers Lease rental is booked as expense and office space is debited and le... View the full answer