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Good Morning, I am really struggling to work out when I should take the deposit away from the Lease value before starting the calculation.
Is there any tips you could give on this?
From what i know lets say you lease something for 100k , and pay 10K deposit on the day.
The right of use asset will be 100k and the lease liability will be 90k .
Why we paid 10k so no longer owe it. So our entries would be
Dr Right of use asset 100k
Cr Bank – what we paid – 10k
Cr Lease Liability 90kThe way i thought about it was if you agreed a lease for 100k and paid 10k deposit and then someone asked how much you owed on the lease you would say 90k , and if they asked for 100k you would say no – think thats correct anyway !
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