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How accounting i.e journal entries will be passed in leasee's books for an operating lease under new us gaap?


Whether ROU & lease liability be recorded in leasee's books or not.... And how subsequent measurement would be done...

asked Nov 18 in 842 Leases by anonymous

1 Answer

0 votes
Operating lease is a lease which does not involve a transfer of risks and rewards of ownership of the leased asset to the lessee. Operating leases normally have a term which is significantly shorter than the useful life of the leased asset and the present value of lease rentals is significantly less than the fair value of the leased asset.
It is a lease which does not meet the recognition criteria of capital lease (i.e. finance lease).
The general entries of operating lease in lessee's books will be;
Year 1
Lease Rental Payment (Dr)
Bank (Cr)
Accrued Lease Rentals (Cr)
Year 2
Lease Rental Expense (Dr)
Accrued Lease Rentals (Dr)
Bank (Cr)
answered Nov 21 by Finance Professional Level 2 Member (4,680 points)


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