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Contributing Cover User
WSBC
Posts: 16
Registered: ‎23-06-2011
Australia
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Setting up Lease Agreement

Morning,

 

We have just taken up a Lease Agreement on a Photocopier and they will debited our account each month. I was wondering how I enter this in MYOB, is it allocated directly to an expense account or do I set up a Liability account?

 

Thanks in Advance.

 

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Experienced Partner
Prabh
Posts: 20
Registered: ‎30-05-2012
Australia

Re: Setting up Lease Agreement

Morning

 

There are few steps involved with asset leasing.

Step 1: Create two liability accounts:

 

  1. Photocopier Lease account
  2. Less Unexpired Interest Charges

Step 2: Create one Asset account

 

  1. Computer Hardware & Software (You can use existing account)

Step 3: Do Journal entry

 

DR----- Computer Hardware & Software A/c   (For whole amount of Lease) (CAP tax code)

CR---- Photocopier Lease A/C                             (For only total Lease amount) (NT Tax code)

CR---- Less Unexpired Interest Charges            (For interest Charge only) (NT Tax code)

 

Once that’s done – you will be doing spend money entry each month for lease amount.

Effect should be:

Dr ----- Photocopier Lease A/C                   (by lease amount)      (GST Tax code)

Cr----- Bank a/c   

 

This is the treatment for lease in your MYOB. Your accountant must know how to deal with these figures during tax return time. Hope this helps. Thank you. 

Regards

Prabh Sandhu, BAcc.
Callaghans Accountants

MYOB CC | ICB member| BAS Agent
P: 02 6256 6000| F: 02 6253 1417 | M: 0406334497
E: prabh@accountant.com | W: www.callaghans.com.au
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Ultimate Partner
Julie_A_C
Posts: 2,571
Registered: ‎07-09-2010
Australia
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Re: Setting up Lease Agreement

How this is set up really depends on the agreement.  A lot of leases are exactly that, a lease, or in other words a hire of equipment with title to the goods never passing. 

 

Then there are some that will have title passing on exchange of $1.00 at the end of the lease term so the actual agreement documents need to be looked at prior to deciding what entries need to be passed.

Julie Carter AIPA, BBus(Acctg),
MYOB Professional Partner, Registered BAS Service Provider
Associate Member of Institute of Public Accountants
ph: 0417 927 654 email: accuratebooks7@gmail.com
Accurate Books Always (Servicing from Leederville to Pinjarra, Fremantle to Armadale WA)
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Contributing Cover User
WSBC
Posts: 16
Registered: ‎23-06-2011
Australia
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Re: Setting up Lease Agreement

Thanks for both of your input, I am now waiting on the accountant to get back to me.

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Ultimate Partner
Geoff_
Posts: 1,226
Registered: ‎21-11-2007
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Re: Setting up Lease Agreement

[ Edited ]

As a backup to what Julie says

 

Don't for get if you are "Leasing" "Hire Purchase" (in the proper usage of the word) a photocopier then the photocopier belongs to the company you are leasing from so you cannot claim GST up front unless it is a Chattel Mortgage.

 

You can then only claim the GST on each payment.

 

If it is a lease then every payment may contain an element of Stamp Duty which of course is GST Free.

 

No doubt someone will disagree with me however only when the ownership of the goods transfers can you claim the full amount of the GST up front.

 

What do you think Julie?

Geoff
Busselton Bookkeeping Service - Bookkeeper and
MYOB Certified Consultant , BAS Service Provider,
Servicing Busselton, Vasse, Yallingup, Cowaramup, Margaret River, Dunsborough, Augusta. Phone 9754 7680
www.busseltonbookkeeping.com.au
e-mail geoff_bookkeeper@hotmail.com
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