Example Co | $20 million annual revenue product company

Schedules

Follow the lease and prepaid balances from opening to closing. Review the suggested entries before entering them in your accounting system.

How Vanward calculates this

Operating lease (ASC 842)

Opening liabilityInterestPaymentEnding liability
$480,000.00$2,000.00$12,000.00$470,000.00

Right-of-use asset: $480,000.00 less $10,000.00 amortization = $470,000.00.

Suggested entry: debit lease expense $12,000.00; credit lease liability $2,000.00 and right-of-use asset $10,000.00. Debit lease liability and credit cash $12,000.00 for payment.

Prepaid insurance

OpeningAdditionsExpenseEnding
$120,000.00$0.00$10,000.00$110,000.00

Suggested entry: debit insurance expense and credit prepaid insurance $10,000.00.

Vanward never posts entries.