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hi and welcome to accounting academy i'm Fitz and this is my dog FIFO we love to help people learn more about accounting so join us on our adventures as we dive into accounting topics on today's adventure we are going to be helping our friend Paul he recently modified some of his leases and has asked for help he owns a chain of veterinary clinics called Pet Vet get back here FIFO it's just the vet Hey Paul how are things going. Hey guys things are going great but I'm totally stumped on how I should account for a few changes to my leases. Well let's run through them see what we can do. Okay great the first clinic is doing a ton of business and we are expanding. I had a thousand square foot office and now I'm adding another thousand square feet. However, the new square footage is being added to the contract at the current market rate which is higher. Okay I see so the cost of the expansion is more than the original square footage you had. Yeah that's corre...
