The finance lease accounting journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of finance or capital leases.
In each case the finance lease accounting journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.
Typical Finance Lease Accounting Journal Entries
A Note on Operating Leases
The other form of lease is an operating lease, in this case the rental payments are simply recorded on a straight line basis as operating expenses.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.