Leased Vehicles

pettkiwi

Can anyone help me with this one, we have traded in a vehicle on a lease vehicle, to which I have disposed the trade-in accordingly, and I am now not sure how to record the lease vehicle in our books.

My understanding of lease vehicles is that they are not actually owned by the company and we pay an operating lease for it. However, we have an invoice from the company we purchased/leased it from for the full amount, together with the lease details which states a residual at the end of the lease, subject to certain kilometre limits within the 3 year period of the lease. Stuck on how to record this in our books so any help is welcome! Thanks .... Tracey

PGM

Sounds like an operating lease, you'll just treat the invoices as the cost and don't recognise the vehicles as capital assets.