Currently, EZLease does not have a specific field to enter a true prepaid rent payment before the begin date of the lease. Instead, enter a rent payment for the first month that includes your prepayment, then enter regular rent for the remainder of the lease term. The accounting effect ends up the same, except that no activity will appear prior to the lease begin date.
For example, you'd enter a lease with the below details as follows:
- Lease term = 5/1/21 - 4/30/27 (72 months)
- Rent = $6,700 per month
- Discount rate = 3.5%
- Prepayment of $6,700 made on 4/20/21
If you have a lease with a single rent payment due at the beginning of the lease, with no further payments, you should set up two rent steps. The first is for the single payment, which can use frequency Monthly or OneTime. The second has zero rent and continues to the end of the lease; use whichever frequency you like (and which is consistent with the dates of the rent step).
Note: Because the prepaid rent is included in the rent payment made on the first day of the lease, it's included in the liability (with no present valuing at the moment), rather than being shown separately. While this is not strictly the way it's presented in the standard, it's a distinction without a difference, since the liability is immediately drawn down the first day of the lease, so the liability balance is identical to what it would be if the prepaid rent were reported separately.
Also, since the prepaid rent was recorded as a larger rent payment on the first day of the lease, EZLease considers the lease to need rent leveling. That may not be appropriate since the intent is simply to record prepaid rent. Given that, and the fact that there are no other changes to the rent during the life of the lease, you'll get better results if you uncheck the Level Operating Rents box on the Inception tab.