NetLessor Direct Financing Journal Entries Overview
Lease Journal Entries
Unless stated otherwise in the specific example, all entries below are based on a lease with the following characteristics:
- Commencement Date = 1/1/2023
- Go-Live Date = 1/1/2023
- Economic Life of Leased Asset = 180 months
- Lease Term = 120 months
- Initial Payment = $3,500
- Leased Asset Fair Value = $1,000,000
- Leased Asset Carrying Cost = $1,000,000
- Total Residual Value Estimate = $500,000
- Residual Value Guaranteed By 3rd Party = $500,000
Go-Live Entry
Additional Information:
- Commencement Date = 1/1/2022
Offsetting Manual Entry:
| Debit | Credit | |
| Go-Live Clearing | 878,000.00 | |
| Net Investment in Lease Receivable | 878,000.00 |
Initial Balance Entry
Additional Information:
- Leased Asset Carrying Cost: $900,000
Additional Information:
- Initial Direct Costs = $10,000
Additional Information:
- Leased Asset Carrying Cost: $900,000
- Initial Direct Costs = $10,000
Additional Information:
- Lease Prepayments = $10,000
Monthly Amortization Entry
Additional Information:
- Leased Asset Carrying Cost: $900,000
Additional Information:
- Initial Direct Costs = $10,000
Additional Information:
- Leased Asset Carrying Cost: $900,000
- Initial Direct Costs: = $10,000
Additional Information:
- Lease Prepayments = $10,000