Processing Monthly Balance Sheet Lessee Accounting Journal Entries

Once you have completed all of the lease commencement tasks, you can then begin processing the monthly journal entries to update the balance sheet for leased assets. You use the Balance Sheet Lessee Accounting Journals program (R15180) to generate monthly balance sheet lessee accounting journal entries for assets that are at a lease liability status of 40 (Commencement Complete).

You use the processing options to specify general ledger information, such as the GL date, and versions to use when creating and posting the journal entries. The version of the G/L MBF (P0900049) that you specify must have a value of Blank in the Zero Amounts processing option on the Zero Amounts tab.

The R15180 generates journal entries using the information from the amortization schedules and the balance sheet lessee accounting AAIs. The recurring billing must also be done to ensure that the balance sheet accounts are reported accurately.

This table outlines the typical journal entries that are created for leased assets on an operating lease in arrears:

Process	Account	AAI	Source from the Amortization Schedules	Debit or Credit
Monthly Journals	Lease Liability	LL	Lease Liability Reduction	Debit
Monthly Journals	Lease Liability	LL	Lease Liability Gain/Loss	Debit
Monthly Journals	Accumulated Amortization	LC	ROUA Reduction	Credit
Monthly Journals	Lease Expense	L1	Accum Amortization - Lease Liability Reduction	Credit
Monthly Journals	Lease Liability Gain/Loss	LG	Lease Liability Gain/Loss	Credit
Recurring Billing	Lease Expense	L1	Lease Payment	Debit
Recurring Billing	A/P Trade	PC	Lease Payment	Credit

This table outlines the typical journal entries that are created for leased assets on an operating lease in advance

Process	Account	AAI	Source from the Amortization Schedules	Debit or Credit
Monthly Journals	Lease Liability	LL	Lease Liability Reduction	Debit
Monthly Journals	Lease Liability	LL	Lease Liability Gain/Loss	Debit
Monthly Journals	Accumulated Amortization	LC	ROUA Reduction	Credit
Monthly Journals	Lease Expense	L1	Accumulated Amortization - Lease Liability Reduction	Credit
Monthly Journals	Lease Expense	L1	Lease Payment	Debit
Monthly Journals	Lease Liability Gain/Loss	LG	Lease Liability Gain/Loss	Credit
Monthly Journals	Pre-paid Rent	L0	Lease Payment	Credit
Recurring Billing	Pre-paid Rent	L0	Lease Payment	Debit
Recurring Billing	A/P Trade	PC	Lease Payment	Credit

This table outlines the typical journal entries that are created for leased assets on a finance lease in arrears:

Process	Account	AAI	Source from the Amortization Schedules	Debit or Credit
Monthly Journals	Lease Liability	LL	Lease Liability Interest Paid	Debit
Monthly Journals	Lease Liability	LL	Lease Liability Gain/Loss	Debit
Monthly Journals	Accumulated Amortization	LC	ROUA Expense	Credit
Monthly Journals	Lease Liability Gain/Loss	LG	Lease Liability Gain/Loss	Credit
Monthly Journals	Amortization Expense	L3	ROUA Expense	Debit
Monthly Journals	Internet Expense	L2	Lease Liability Interest Paid	Debit
Recurring Billing	Lease Liability	LL	Lease Payment	Debit
Recurring Billing	A/P Trade	PC	Lease Payment	Credit

This table outlines the typical journal entries that are created for leased assets on a finance lease in advance:

Process	Account	AAI	Source from the Amortization Schedules	Debit or Credit
Monthly Journals	Lease Liability	LL	Lease Payment	Debit
Monthly Journals	Lease Liability	LL	Lease Liability Interest Paid	Debit
Monthly Journals	Lease Liability	LL	Lease Liability Loss/Gain	Debit
Monthly Journals	Accumulated Amortization	LC	ROUA Expense	Credit
Monthly Journals	Lease Liability Gain/Loss	LG	Lease Liability Gain/Loss	Credit
Monthly Journals	Pre-paid Rent	L0	Lease Payment	Credit
Monthly Journals	Amortization Expense	L3	ROUA Expense	Debit
Monthly Journals	Internet Expense	L2	Lease Liability Interest Paid	Debit
Recurring Billing	Pre-paid Rent	L0	Lease Payment	Debit
Recurring Billing	A/P Trade	PC	Lease Payment	Credit

When you run the R15180, the system creates a batch of journal entries using the Create Lessee Accounting Journal Entries business function (B1501420). The system also updates each processed row in the amortization schedules for the associated assets with the G/L Date, Document Number, and an indicator appears in the Lessee Journals Exist field.

When you run the R15180, you can specify the through month and year in the processing options. If you do not specify a through month and year, the system date is used. The processing options also enable you to define where the exchange rate has to come from. The system processes all months for the selected assets that do not have values in the Document Number field, up to the through month and year. This enables you to process multiple months at once, ensuring that journal entries for months that were already processed are not created again. The program also updates the Lease Master Detail table (F15017) with the schedule date of the last month processed.

Note: If you have made lease term changes for a leased asset, the system updates the Recalculate Lease Liability field on the lease, indicating that the lease must be remeasured before you can continue processing. If you attempt to run the R15180 for assets that have the Recalculate Lease Liability flag set to 1 (Remeasure Only) or 2 (Early Termination Option), you will receive an error. You must recalculate the amortization schedules using the appropriate option, or clear the Recalculate Lease Liability flag before you can process monthly balance sheet accounting journal entries. See Changing Lease Terms After Schedule Creation for additional information.

Once the journal entries have been created, you can then review, approve, delete, and post them using the same method as you do with the lease commencement journal entries. See Reviewing, Approving and Posting Lease Commencement Journal Entries for additional information.

Throughout the lease cycle of an asset, you can use the Work With Amortization Schedules program to view detailed information about which months have been processed, and to access additional balance sheet lessee accounting information. This program displays icons to identify the following conditions:

• Journal entries for the month have been created. (Green icon on the amortization schedule detail.)

• As-of balance records for the month have been created. (Yellow icon on the amortization schedule detail)

• Journal entries for the month have not been processed in the last 30 days, and are likely overdue. (Red icon on the Work With Amortization Schedules form, and all journal entry fields are blank.)

• Termination processing has been completed for this asset, and termination journal entries exist for this period. (Red icon on the amortization schedule detail, and journal entry fields are populated in the amortization schedule table but are displayed as blank in the program.)

When you process the R15180 for the last month of a leased asset, the system updates the lease liability status on the lease detail line to 50 (Schedules Completed). Note that in some instances, the ROU asset schedule is longer than the lease liability schedule. The system does not update the status to 50 until both schedules are complete.