Answer
If the accounting period ends on the 31st of December, the whole expenditure will be an expense recorded in the expense account. However, if it ends before the 31st of December, part of the expenditure will be expensed while part will be treated as an asset.
Work Step by Step
How this expenditure will end up on the statements depends on where the end of the accounting period is. If it ends earlier than the end of December, part of the expenditure is an expense while the one affiliated with the remaining months will be treated as an asset. However, if it ends on the 31st of December, the whole expenditure will be charged to the expense account. Thus, the original entry, as well as the adjusting entry, take the date into account.
