BLM15525 - Lease accounting: finance lease accounting: finance lessees: example 1: the accounting entries
The allocation of the rentals at BLM15520 can then be translated into accounts format:
| Balance Sheet | £ At Start | £ Year 1 | £ Year 2 |
|---|---|---|---|
| Assets | |||
| Leased Asset | 50,000 | 50,000 | 50,000 |
| Depreciation | - | 2,500 | 5,000 |
| Balance | 50,000 | 47,500 | 45,000 |
| Liabilities | |||
| Lease Creditor | - | 50,000 | 41,414 |
| Repayment | - | 8,586 | 9,241 |
| Net | - | 41,414 | 32,173 |
| Profit and Loss Account | |||
| Depreciation | - | 2,500 | 2,500 |
| Finance Charge | - | 3,814 | 3,159 |