Dr. Leasehold improvement (adding to capital assets) $84,205
Please help me understand this.
In general, when you incur costs for leasehold improvement, you should
Dr Leasehold improvement (fixed asset)
Hope it helps.
The entity (PAL) simply booked the NBV of leasehold improvements which HSI left behind. (HIS ceased the operation). Please refer to page 1 and 7 for the information.
So if PAL paid the $84,205 for leasehold improvement, the costs should be capitalized as you mentioned below.
Dr. leasehold improvement (fixed asset)
But, because HSI left these assets behind and PAL simply included these on PAL's F/S at NBV, I was not sure what account would be credited.