Finance lease

Lease obligation of $12,000.00, monthly payment of $1,000.00, monthly interest of $80.00, and no non-lease components costs.

• One time entries:

  The process used for creating entries is Mass Lease Release. The invoice is created after the leased asset is released. See Lease creation and testing.

  Account name	Debit	Credit
  Asset account*	12,000.00
  Debt account**		12,000.00

  * Define the asset account when you create the asset type used for the asset.

  ** For the purpose of leased assets, the clearing account matches the lease debt account. The debt account is automatically used in place of the clearing account that you specified when you created the account group used for the asset.

• Monthly entries in Payables:

  The process used for creating entries is Invoice Distribution Closing. The invoice is created after the lease payment has been interfaced to Payables. See Creating leave invoices.

  Account name	Debit	Credit
  Debt account	1,000.00
  Payables account		1,000.00

• Monthly entries (Lease Accounting):

  Process creating entry: Lease Interest Calculation

  After creation, the interest is calculated. See Calculating lease interest.

  Account name	Debit	Credit
  Debt account		80.00
  Interest expense account*	80.00

  * Define the interest expense account on the Payments tab of Lease Addition and Adjustments.