LEASE RENT FREE PERIOD ACCOUNTING TREATMENT

We have a requirement to account for rent free period in which revenue should be recognize and subsequently when invoice is due after rent free period.

Module Using: Oracle GL / AR 12.1.3

Scenario:

Lease amount: 12,000

commencement date: 01/Jan/2015

Rent commencement date: 01-Apr-2015

Lease expiry date: 31-Mar-2016

total periods: 15

# of instalments:  1

Revenue Amount to be spread evenly over lease period 12,000 / 15 = 800 per month

Question 1> what should be the accounting for rent free period and in which Oracle Module should we record this entry? GL or AR.

example: Unbilled receivable (dr) / Revenue (cr)

Question 2> what should be the accounting once invoice due for 12,000 in Apr-2015? should be recorded in AR Module.