hai
when the lease amt is paid in lumpsum in the first year itself. how the accounting entry for this? whether the amt paid will be write off over the lease period? any consequences will be arise in this issue in tax view?
pls reply very urgent
thanks in advance
Bank A/c Dr. xxxx
To Lease rent A/c xxxx (the amount which pertains to this year)
To Advance Rent A/c xxxx (the balance of the amount received)
From the 2nd year onwards,
Advance Rent A/c Dr.
To Lease Rent A/c
In that case just reverse the entries.
1. When payment is made:
Lease rent A/c Dr. xxxx (the amount which pertains to this year)
Advance Rent A/c Dr. xxxx (the balance of the amount paid)
To Bank A/c xxxxx
2. From the second year onwards,
Lease Rent A/c Dr.
To Advance Rent A/c
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