Lease Purchase Interest

ereid Registered Posts: 28 Regular contributor ⭐
Hope someone can help with this small query

I have spotted the above on the Trial Balance with a Balance Sheet code??

Should this be on the P & L please?

Many thanks


  • Rinske
    Rinske Registered Posts: 2,453 Beyond epic contributor 🧙‍♂️
    It depends on what it is.

    If it is paid interest, you would expect it on the P&L but possibly reducing the accrued interest.
    If it is accrued interest it would be on the balance sheet, rather than on the P & L.

    For lease purchases of assets, which are capitalised, you would expect a part liability for the asset and a part interest payable. You would expect it on the balance sheet for future payments and on the P&L for current payments made.

    Hope that helps.
  • ereid
    ereid Registered Posts: 28 Regular contributor ⭐
    Lease Purchase Interest

    Thanks for your help

    It is paid interest on a Lease purchase agreement so confirmation that it is a P & L item?

    Just out of interest though - how would accrued interest come about?

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