Lease Purchase Interest

ereid

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

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.
Cheers,
Rinske

ereid

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?

Thanks