F5.2 Leases, Liabilities, and Bonds

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Author:
salacas
ID:
227614
Filename:
F5.2 Leases, Liabilities, and Bonds
Updated:
2013-07-19 18:49:12
Tags:
F5 Leases Liabilities Bonds
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F5.2 Leases, Liabilities, and Bonds
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  1. Lessee-Person who is leasing from Lessor. Entry to record Lease Rent Expense
    The lessee records rent expense over the lease term, usually on a straight line basis unless other methods are warrented:

    • Rent expense  DR.
    • Cash/rent payable CR.
  2. How should the leasehold improvements be depreciated (amortized)?
    • Over the lesser of:
    • Lease life 
    • Asset/improvement life
  3. Entry to record free or discounted rent
    • rent expense dr. 
    •    rent payable  cr.
  4. Entry to record regular rent after discount or free period is over
    • Rent expense DR.
    • Rent payable  DR. 
    •       Cash/rent payable   CR ( this part is added after the free period is over )

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