Hi, a client has leased a van for many months, but agreed with lease company that they would sell to a third party. A settlement figure has been paid to the lease company and the van sold (sales invoice raised). Lease company has also invoiced for share of proceeds amount.
Could someone give me guidance on how this should be entered in the accounts.
Lease rental have been paid monthly, figures on P & L.
Hi, a client has leased a van for many months, but agreed with lease company that they would sell to a third party. A settlement figure has been paid to the lease company and the van sold (sales invoice raised). Lease company has also invoiced for share of proceeds amount.
Could someone give me guidance on how this should be entered in the accounts.
Do you mean a finance lease or operating lease?
If operating leases not sure why the lease company are letting the client sell their van!
If finance lease then should have been recorded as an asset with tax relief claimed on depreciation, and so treat as normal disposal
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
So many get this wrong due to mis-understanding of the phraseology used and never seeing the actual contract, which of course is key for accounting and tax treatment
