I have bought old restaurant on lease and I have spent money on refurbished of restaurant like plumbing, electrical, Tiles , lights and other expenses for long time.
So please give me advice for accounts entry.
Example
Repair and Maintenance (Asset) Dr.
Cash. Cr.
This entry is right or wrong and what will depreciation value?
Correct.
Divide the expenditure equally over the period of lease.
This is not a right to use asset like in indas. Your running a business and your paying lease for the building. But the tiles fall under asset criteria and its leasehold improvements. You can depreciate it based on the term of the lease because the lessor will take it away from you.
CAclubindia
