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Finance Lease And the Balance Sheet
Hi guys,
Can anyone explain how a finace lease would be recorded on the balance sheet to get A-L=E to hold.
Assume in year 1: 10,000 lease payment, interest exp of 2,079, depreciation of 8,663, and a lease liability and asset of 34,651.
I believe that acc. depr goes up by 8,663 (assets down), interest payable goes down by 2,079, (liabilities down), and retained earnings are down by the sum of the two, flowing through the income statement. That balances. But then what is happening to the lease liability and asset you create, are they just sitting there?
Any help appreciated!
Thanks!
Edited 1 time(s). Last edit at Saturday, March 12, 2011 at 01:08PM by ftwcfa. |
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