Knowledge Sharing | Calculate Monthly Lease Interest for Nonmonthly Asset Lease Payments
Summary
Knowledge Sharing | Calculate Monthly Lease Interest for Nonmonthly Asset Lease PaymentsContent
This feature is available in 20A
Summary
Calculate monthly accrued interest for leases with quarterly, semi-annual, or annual frequency. The application calculates the present value based on the lease payment frequency, and then allocates the calculated interest evenly to each month.
Detail Process
The Create Lease page includes a new option, Calculate monthly accrued interest. Normally, for a lease with a nonmonthly payment frequency, for example, a quarterly payment frequency, the application accounts for interest on lease liability at the end of each quarter as and when the payment occurs. As a result, there is no interest expense in other accounting periods. When you enable the Calculate monthly accrued interest option, the application accounts for interest on lease liability monthly instead of quarterly.