Response to the following questions:
1. On January 4 of this year, Larsen Boutique incurs a $95,000 cost to modernize its store. Improvements include new floors, ceilings, wiring, and wall coverings. These improvements are estimated to yield benefits for 10 years. Larsen leases its store and has eight years remaining on the lease. Prepare the entry to record (1) the cost of modernization and (2) amortization at the end of this current year.
2. When do we know that a company has goodwill? When can goodwill appear in a company's balance sheet?