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ACCT 306 CASE PROJECT
On January 1, 2014, Need More Room, Inc. (NMR) entered into a lease agreement with
We Rent Space, Inc. (WRS) to rent space for its corporate offices. Based on the lease agreement,
the lease is properly classified as an operating lease. The lease has a 10-year lease term (expires
on December 31, 2023), and there is no option to renew nor is the ability to negotiate for renewal
provided in the lease agreement. In addition, the lease agreement contains two provisions that
require NMR to incur certain one-time costs at the end of the lease
term.