Before You Begin

This 45-min OBE shows you how to create monthly journal entries for the amortization schedule. After creating journal entries, you can review and post them.

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?

• Created and posted lease commencement journal entries
• Set processing options for monthly journals in the Lessee Balance Sheet Accounting Journals program (R15180).

Generating Monthly Journal Entries

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), Periodic Processing (G1520220), Balance Sheet Lessee Accounting Journals (R15180).
2. On the Work With Batch Versions – Available Versions form, select version XJDE0003. The Version Prompting form is displayed.
3. On the Version Prompting form, select the box for Data Selection.
4. Click Submit.
5. On the Data Selection form, complete the fields:
   • Left Operand: Asset Item Number (F15017)
   • Comparison: Is equal to
   • Right Operand: Literal, 355910 (Your asset that was created for the lease)
6. Click OK.
7. Set the processing options by following the steps in the OBE “Monthly Processing—R15180 Processing Options”.
8. Click OK. The Printer Selection form is displayed.
9. On the Printer Selection form, click OK.
10. On the Work With Batch Versions form, select Submitted Jobs on the form exit.
11. Find the batch job you just submitted: Balance Sheet Lessee Acctg Journals – Errors Only.
12. Click on the View Output grid column and click Open when prompted.

Review the report to ensure there are no errors. Note the batch number.

Your monthly journal report should look like this:



13. Click Close to exit the Submitted Jobs form.
14. Click Close to exit the Work With Batch Versions form.

Reviewing Amortization Schedules

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), Periodic Processing (G15202220), Amortization Schedules (P15171).
2. On the Work with Amortization Schedules form, enter the lease number 20491 find the lessee lease you created in the OBE “Creating a Lessee Lease”.
3. Click Find. Lease 20491 is displayed in the grid.

Note: The journal entry Through Date is updated to 01/01/2019.



4. From the Row menu, select Amortization Sched and then select Lease Liability to review the schedule after monthly journals are created for 01/01/19.
   • A green circle icon is displayed which indicates that monthly journals were created for the schedule line.
   • The Batch Number, Document Number, Document Company, and G/L Date grid columns are populated with the information from monthly journal processing.

   Note: The same batch information is displayed from both the lease liability and right of use asset schedules.
   This is how the amortization schedules should look after the monthly journals are created:

   

   

Reviewing Monthly Journal Entries

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), Periodic Processing (G1520220), Balance Sheet Lessee Accounting Batch Review (P150911).
2. From the Work with Lessee Accounting Batch Review form, select the grid row for the monthly journals batch for January 2019.
   • Batch: 1189053 (Your batch that was created)
   • G/L Date: 01/31/19
   • Explanation/Remark: Balance Sheet Lessee Journals
   • Batch Status: A (Approved)
3. Select JE Review from the Row menu.
4. Review the journal entries created for a finance type lease:
   • Debit to Lease Liability
     • AAI = LL
     • From Lease Liability schedule → Payment Amount
   • Debit to Interest Expense
     • AAI = L2
     • From Lease Liability schedule → Interest Paid
   • Debit to Amortization Expense
     • AAI = L3
     • From Lease Liability schedule → ROUA Expense
   • Credit to Prepaid Rent - Lessee
     • AAI = L0
     • From Lease Liability schedule → Payment Amount
   • Credit to Accumulated Amortization
     • AAI = LC
     • From Lease Liability schedule → ROUA Expense
   • Credit to Lease Liability
     • AAI = LL
     • From Lease Liability schedule → Interest Paid

   This is how the monthly journal entries for January 2019 should look like:

   

5. Click Cancel to exit the Journal Entry Review form and return to the Work With form.

Reviewing Monthly Journal Entries

1. Navigate to EnterpriseOne Menus, Financials (G1), Lessee Accounting (G15202), Periodic Processing (G1520220), Balance Sheet Lessee Accounting Batch Review (P150911).
2. From the Work with Lessee Accounting Batch Review form, select the grid row for the monthly journals batch for January 2019.
   • Batch: 1189053 (Your batch that was created)
   • G/L Date: 01/31/19
   • Explanation/Remark: Balance Sheet Lessee Journals
   • Batch Status: A (Approved)
3. Select Post by Batch from the Row menu.
   • From the Printer Selection form, click OK to return to the Work With Lessee Accounting Batch Review form.
   • On the Work with Lessee Accounting Batch Review form, select Submitted Jobs from the row exit.
   • Find the batch job you just submitted: General Ledger Post—Lessee Accounting.
   • Click on the View Output grid column and click Open when prompted to review the report.

This is how the General Ledger Post report should look:



4. Click Close to return to the Work with Lessee Accounting Batch Review form.
5. Make sure that the option to display All Batches is selected and click Find.

Note that the Batch Status is D (Posted) for the monthly journal you just posted.
This is how your monthly journal batch record should look:

Completing Monthly Journal Entries for the First Quarter

1. Repeat the process for posting monthly journal entries for the rest of the first quarter:

Note: As monthly journals are processed, the JE Through Date is updated to reflect the schedule month that has been run. When monthly journals have been completed for the 1st quarter, the JE Through Date becomes 03/01/2019.

2. To generate monthly journals, reset the processing options for R15180 to run monthly journals for February and March of 2019:

Through Month	Through Year	Proof or Final	G/L Date	Print Option	Approval
2	19	Final	02/28/19	2	1
2	19	Final	03/31/19	2	1

3. Review the amortization schedule for each monthly journal using the Amortization Schedules program (P15171).

This is how the amortization schedules should look after creating monthly journals for the first quarter:





4. Review the monthly journal entries using the Balance Sheet Lessee Accounting batch program (P150911).
   • February: G/L Date = 02/28/19
   • March: G/L Date = 03/31/19

   This is how the journal entries should look after you create monthly journals for the first quarter:

   

   

5. Post the monthly journal entries using the Balance Sheet Lessee Accounting batch program (P150911) for February and then for March of 2019.

This is how the post reports should look after monthly journals are posted for the first quarter: