--- In taxchat@yahoogroups.com, "Debbie Breedlove" <dbreedlove@...>
wrote:
>
> Debit $100,000 to Leasehold Improvements (to be amortized)
> Credit $100,000 to Note Payable
>
> Figure out what the effective interest rate is when paying $20,000
in interest on $100,000 over 5 years. Prepare an amortization
schedule, and allocate the $2,000 to principal and interest each
month according to the amortization schedule.
>
> I don't know if that's what you have to do, but that's what I would
do.
>
>
> From: Debbie Wilson
> Sent: Wednesday, October 29, 2008 9:27 AM
> To: 'TaxTalk Listserv Members'
> Cc: taxchat@yahoogroups.com
> Subject: [taxchat] additional buildout
>
>
>
> My large franchise account has just signed a lease and in that
lease is a section called "additional buildout rental amount
payment". The owner of the building paid part of the leasehold
improvements, $100,000.00, that my client will have to pay back to
the owner over the five years of the lease. They are tacking
$2000.00 additional on to the rent payment each month so will
actually pay back $120,000.00. I'm not sure how to record this. Is
it additional rent or do I have to record it as a loan with the
$20,000.00 spread over the 5 years and capitalize the $100,000.00.
any help would be appreciated.
>
>
>
> Sincerely,
>
>
>
> Debbie Wilson EA
>
> Preferred Accounting
>
> 420 E Beloit St.
>
> Darien, WI 53114
>
>
>
> 262-724-3635 Tel
>
> 262-724-5645 Fax
>
>
>
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