Before You Begin

This 15-minute OBE shows you how to interactively create amortization schedules. The system creates lease liability and right of use asset schedules based on the recurring and manual billings that you have set up. You use the processing options from the XJDE0002 version of R15170 to specify the type of proration that occurs when the schedules are created. You will also see how the schedule amounts are calculated for a finance type lease.

Background

Many businesses lease office space and equipment from different suppliers. According to the new lease accounting standards, businesses must account for these leases and the leased asset on them on their balance sheets. The Lease Accounting functionality in JD Edwards provides the ability to comply with these standards.

Scenario Guidelines

In this series of OBEs, you will learn how to set up the system and perform the required actions for following lease scenario:

• You are leasing a copier from Electronics R Us.
• The lease is for two years and you expect to return the copier at the end of the lease.
• You will pay $2,500 quarterly in advance.
• You have to pay an up-front installation charge of $1,000 to secure the lease.
• At the beginning of the second quarter, you renegotiate the price of this lease based on an agreement to lease other equipment from the vendor and they agree to a price break on the existing lease. Your new quarterly payment will be $2,250 starting from the second quarter.
• At the end of the second quarter, the copier breaks down and the cost of repairs is greater than the replacement cost, so you negotiate with the vendor to terminate this lease and create a new one for a newer copier model.

What Do You Need?

You must have completed the following tasks:

• Set up processing options for R15170 version XJDE0002.
• Created a lease
• Created recurring and manual billings

Creating Amortization Schedules

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), Periodic Processing (G1520220), Amortization Schedules (P15171).
2. On the Work with Amortization Schedules form, enter 20941 as the Lease Number to find the lessee lease you created in the OBE "Creating a Lessee Lease".
3. Click Find.

Lease 20941 is displayed in the grid.



4. Select Status Change from the Row menu



5. Change the Lease Liability Status to the status that is required for creating amortization schedules.
   • Change the following field from the Lease Liability Status Update pop-up window:
     • Lease Liability Status: 10 (Lease Terms Complete)

Note the Lease Number and Asset Number are displayed.
The Lease Liability Status Update dialog window should look like this:



6. Click OK to save the change to the lease liability status and exit the pop-up window.

The lease liability status is updated in the Work with Amortization Schedules form and a Row menu is now available to create amortization schedules for the asset.
Your equipment asset record should look like this:



7. Select Create Amort Sched from the row exit.

   The amortization schedules for the asset are created.

   • The Lease Liability Status is updated to 20 (Amortization Schedules Created)
   • A green circle icon is displayed in the Schedule Exists grid column
   • The ROUA End Date is updated with the Ending Date from recurring billing – 12/31/2020.

Your equipment asset record should lookj like this:

Understanding Amortization Schedule Calculations

The below image shows amortization calculations.