How to enter an Equipment lease where payments are made in advance?
Hi,
We are struggling to find the correct way to enter leases that are effectively paid in advance, meaning in december, the rentis paid for januari, in januari the lease is paid for februari etc...
In this scenario, If you consider a lease that runs from 1-jan-2019 to 31-dec-2022, then the first payment is effectively made in december-2018, whilst the last payment will be made in november-2022.
For now, we enter these contracts as follows:
- Contract start date = 1-jan-2019 and contract end date = 31-dec-2022, in line with the period where the asset is at our disposal
- We record a payment term for a one off payment on 1-jan-2019 to catchup the missed payment in december-18