You are a corporate accountant for a company that provides services to a large online retailer. Your company extensively uses conveyor belts to move shipping boxes and their contents through its warehouse, the seams in the company’s conveyor belts have stated to jam periodically, at times bringing the belts to a stop, the company has invested $100,000 to apply a special bonding agent to the belts’ seams so they won’t jam anymore. By applying this bonding agent, the company can avoid replacing the belts to Fix this jamming issue, there is a chance that this bonding agent will also result in the belts’ useful lives being extended by a few years. Assume that a plant accountant has contacted you to ask whether the bonding agent should be recorded as an asset or an expense. Using guidance from the Conceptual framework, analyze this issue and prepare an email response to the plant accountant.
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