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Setting up Lease Agreement

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Contributing Cover User WSBC
16 Posts
Contributing Cover User

Setting up Lease Agreement



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.


Experienced Partner AdvisorCorp
20 Posts
Experienced Partner

Re: Setting up Lease Agreement



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. 

Kind regards.

Prabh Sandhu
MYOB CC | Tax Agent
M: 0406334497 | E:
Ultimate Cover User Julie_A_C
3,006 Posts
Ultimate Cover User

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
Member Association of Accounting Technicians
ph: 0417 927 654 email:
JAC' of All Trades Bookkeeping (Servicing from Leederville to Pinjarra, Fremantle to Armadale WA)
Contributing Cover User WSBC
16 Posts
Contributing Cover User

Re: Setting up Lease Agreement

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

Ultimate Partner Geoff_
1,644 Posts
Ultimate Partner

Re: Setting up Lease Agreement

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?

Busselton Bookkeeping Service
MYOB Certified Consultant, BAS Service Provider
Phone 08 9754 7680
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