How to write accounting entries for store leasing
In the process of transactions, enterprises sometimes need to rent stores to develop business. Leased stores can be accounted for in the fixed assets account. How should accountants prepare specific accounting entries?
Accounting entries of rented stores
Leases can be divided into operating leases and financial leases. Financial leases refer to leases that substantially transfer all risks and rewards related to asset ownership. Ownership may or may not be transferred to the lessee. Operating leases refer to leases other than finance leases.
1、 For the fixed assets leased for operation, the rent paid shall be included in the relevant costs according to the beneficiary department, the production expenses shall be included in the manufacturing expenses, and the management departments shall include the management expenses.
1. Monthly accrual:
Debit: manufacturing expenses/management expenses
Credit: other payables
2. At the time of payment
Debit: other payables
Credit: bank deposit/cash on hand
2、 The entry value of fixed assets under finance lease shall be the price determined in accordance with the lease agreement or contract, insurance premium in transit, installation and commissioning costs, transportation costs and a series of borrowing costs incurred before the fixed assets under finance lease reach the expected serviceable condition on the lease beginning date.
1. Fixed assets leased in by finance lease should be regarded as self owned assets. When leasing in:
Debit: fixed assets - fixed assets under financing lease
Credit: long-term payables - finance lease payables
2. Monthly depreciation:
Debit: administrative expense/selling expense/manufacturing expense -- depreciation expense
Credit: accumulated depreciation
3. In case of installment payment:
Debit: long-term payables - finance lease payables
Credit: bank deposit
At the end of the lease, if the ownership belongs to the lessee, the accounting entry is:
Debit: fixed assets related equipment
Credit: fixed assets -- fixed assets under financing lease
What are fixed assets?
Fixed assets refer to non monetary assets held by an enterprise for the purpose of producing products, providing labor services, leasing or operating management, which have been used for more than 12 months and have reached a certain value standard, including houses, buildings, machinery, machinery, means of transport and other equipment, appliances, tools, etc. related to production and operating activities. Fixed assets are not only the means of labor of enterprises, but also the main assets on which enterprises rely for production and operation. From the perspective of accounting, fixed assets are generally divided into fixed assets for production, fixed assets for non production, leased fixed assets, unused fixed assets, fixed assets for financial leasing, fixed assets not required for use, fixed assets receiving donations, etc.