Term
Recording a Capital Lease on
company books |
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Definition
Leased Equipment 100,000
under Cap Lease
Lease Liability 100,000 |
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Term
Recording Payment
consists of...:(Capital) |
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Definition
(1) a reduction to lease liability
(2) a financing cost(interest expense)
(3) executory costs (prop taxes)
Example for 1st payment from p.1098
Prop Tax Expense 2,000
Lease Liability 23,981.62
Cash 25,981.62 |
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Term
End of Year Journal Entries
Record What?
How? |
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Definition
Dec 31 Int Exp xxx
Int Pay xxx
Dec 31 Depr. Expense-Cap xxx
Accum Depr xxx
If item changes ownership or has BPO
-use economic life of asset for Depr.
If it doesn't
- use term of lease |
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Term
1st annual payment (2nd overall)
Journal Entry - pg 1099
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Definition
Prop Tax Expense xxx
Int Payable xxx
Lease Liability xxx
Cash xxx |
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Term
1st Journal Entries when
leasing--Operating Lessee |
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Definition
Rent Expense
Cash 25,981.62 |
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