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Right of Use Asset value NOT equal to Lease Liability – double entry?

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Right of Use Asset value NOT equal to Lease Liability – double entry?

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  • December 22, 2021 at 2:36 pm #644698
    Darren
    Participant
    • Topics: 10
    • Replies: 9
    • ☆

    Hi,

    If I have:

    Present Value of future lease costs = 10,250 and
    Lease Administration Fee = 250
    Then the Right of Use asset is 10,500

    But the lease liability is 10,250.

    If I

    Debit Right of Use Asset 10,500
    Credit Lease Liability 10,250

    the entry doesn’t balance.

    I don’t know how to post this entry?

    December 23, 2021 at 8:00 am #644721
    f6ali
    Member
    • Topics: 10
    • Replies: 342
    • ☆☆☆

    If you wish to ask the tutor directly then kindly start a thread in Ask the Tutor forums. This forum is for students to help each other.

    The lease administration costs will presumably be paid for in cash, hence the credit entry will be in cash account.

    December 23, 2021 at 10:32 pm #644752
    Darren
    Participant
    • Topics: 10
    • Replies: 9
    • ☆

    Hi F6ali

    I didn’t want to ask the tutor directly and this is why I posted in this forum.

    But thank you for your advice.

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