please let me know the below confusion:
we have taken building in lease and we are paying montly rent 250000 per month. and the lease period is for 2 years and it can extend futher in second term.
please let me know whether i should add this in the assets side of the balance sheet or not . and please tell how should i do valuation of this assets.
i shall be very grateful to u.
thankyou in advance.
hi,
Consider passing following JVs for the building taken on Lease.
(1) Upon entering into lease agreement,
Building on Lease Dr 60L
To Lease Rentals payable 60L
(2) Ist year-end
Lease Rentals Payable Dr
To Bank 30L
P&L Dr.
To Lease Rentals 30L
Further, deduct 30L from 'Building-Lease' in Bal.Sheet.
Repeat similar entries as in (2) for the year2.
You have not mentioned about any advance payment, so the same
is ignored.
Had better wait for some more replies.
CAclubindia
