ASC 842 Leases: Schedules and Journal Entries

The lease record

Open the Leases app. All Leases is the portfolio. A lease record shows classification (lessee), lease type (operating or finance), term, discount rate, base payment, lessee, lessor, initial lease liability, and initial right-of-use asset. You enter the term, the payments, and the discount rate. CloseFlow calculates the liability and the right-of-use asset from those inputs. You still decide whether the contract is a lease and whether a renewal is reasonably certain. Edit, Delete, and Terminate are on the lease.

The amortization schedule

The Amortization tab is the monthly schedule: cash payment, interest, principal, ending liability, short-term and long-term portions, amortization, accumulated amortization, right-of-use asset ending balance, present value, and lease expense. Details, Recurring Charges, Comments, Attachments, Accounting Entries, and Activity are the other tabs. Initial direct costs, prepaid rent, lease incentives, and residual value guarantees belong on the lease when the contract has them. They change the calculation only when they are recorded on that lease.

Journal entry to QuickBooks

Accounting Entries is the period's lease expense, interest, and amortization. The entry pushes to QuickBooks Online or Intuit Enterprise Suite only after it is approved. Nothing posts on a timer. Admins can turn on Automatically push approved entries to QuickBooks so the approval sends the entry immediately. Confirm the entry in QuickBooks, then support the right-of-use asset and the lease liability in Reconciliations. The QBO Sync Log shows the push.

1. Open the lease and check the classification, term, payment, and discount rate.
2. Read the amortization schedule before you rely on the month's expense.
3. Approve the accounting entry for the period.
4. Reconcile the lease accounts to the schedule after the entry is in QuickBooks.