Journal Entries Report – EZLease Success Center

Overview

The journal entries report displays, for each report period, a detail of the transactions that result in activity on all income statement and balance sheet accounts. Each transaction shows the debits and credits to each account, with a brief description of the transaction. See the report options help article to see all the available report parameters and what they mean.

Spreadsheet Output

In additional to being able to run the report as a PDF, you can also run the report as a spreadsheet by selecting the "spreadsheet" output radio button. This provides an excel report, which is then able to be filtered and reorganized, as needed.

If you have checked the box “Include account numbers on spreadsheets” in the Account Numbering workspace (File > System Options), the account number for each account is shown on each transaction line.

Single Column Format

This option is available only for spreadsheet output. Normally the journal entries report has separate columns for debit and credit entries, and the amounts in either case are shown as positive numbers. Check this box to display debits as positive numbers and credits as negative numbers in the same column. If selected, the account name is also shown in a single column, rather than separate columns for debit and credit entries.

Finance Leases

At the start of the lease, the lease is booked: Right-of-Use asset is debited, current and long-term liability are credited.

On the first day of the rent period (if the lease is paid in advance) or the last day of the period (if the lease is paid in arrears), rent is paid: current liability and accrued interest are debited, cash is credited. If there are variable lease payments, that is shown separately. If more than 12 months remain on the lease, long term liability is debited and current liability is credited to reflect reclassification of liability to be paid 12 months out.

Once per report period, interest is accrued and expensed: Interest expense is debited, accrued interest is credited. (Note that if a lease is paid at the beginning of a rent period, interest expense is not the same as interest paid for that period. The current period’s interest expense is paid at the beginning of next payment period.)

Once per report period, depreciation is accrued and expensed: Depreciation expense is debited, accumulated depreciation is credited.

If a lease is early terminated, it is removed from the books: Accumulated depreciation, current liability, long term liability, and accrued interest are debited; Right-of-Use asset is credited. A balancing entry is made for the difference between the debits and credits, as a termination gain or loss; in most cases, you will have a termination gain, which is a credit.

When a lease expires, it is removed from the books: Accumulated depreciation is debited, Right-of-Use asset is credited. If the lease has a guaranteed residual, current liability and (if the lease is paid in advance) accrued interest are debited; combined, they equal the guaranteed residual, which payment is a credit to cash. If the debits and credits are not equal (for example, because of a salvage value, or depreciation over an economic life longer than the lease term due to ownership transfer/reasonably certain purchase option), a termination gain or loss is booked as the balancing entry. A gain is a credit; a loss is a debit.

Operating Leases (ASC 842)

On the first day of the rent period (if the lease is paid in advance) or the last day of the rent period (if the lease is paid in arrears), rent is paid: Operating lease cost and current liability are debited, cash and accumulated depreciation are credited. If there are variable lease payments, that is shown separately. If more than 12 months remain on the lease, long term liability is debited and current liability is credited to reflect reclassification of liability to be paid 12 months out.

Operating Leases (FAS 13/IAS 17)

On the first day of the rent period (if the lease is paid in advance) or the last day of the rent period (if the lease is paid in arrears), rent is paid: Operating rent expense is debited, cash is credited. If there are variable lease payments, that is shown separately.

If the rents are leveled, there is also a debit or credit to deferred rent for the difference between the cash rent payment and the rent expense.

If a lease is set up with a deferred rent rollover, this is set up at the start of the lease with (for a deferred liability) a debit to addition loss and a credit to deferred liability.

If a lease with leveled rents is early terminated, the deferred rent asset or liability is removed. A deferred rent liability is debited, with a termination gain credited; conversely, a deferred rent asset is credited, with a termination loss debited.