{"id":1889,"date":"2019-09-05T14:45:26","date_gmt":"2019-09-05T14:45:26","guid":{"rendered":"https:\/\/visuallease.com\/?page_id=1889"},"modified":"2025-11-24T04:19:35","modified_gmt":"2025-11-24T08:19:35","slug":"asc-842-journal-entries","status":"publish","type":"page","link":"https:\/\/visuallease.com\/software\/lease-accounting\/asc-842-journal-entries\/","title":{"rendered":"Lease Accounting Journal Entries"},"content":{"rendered":"[vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;center&#8221; top_padding=&#8221;2%&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<p style=\"text-align: center\">The new Financial Accounting and Standards Board (FASB) lease accounting standard, ASC 842, requires companies to capture and report on their leased assets. As a result, this improves transparency regarding company leasing obligations.<\/p>\n<p style=\"text-align: center\">But how are leases properly accounted for within ASC 842 journal entries? ASC 842 contains many major nuances your company needs to adapt to.<\/p>\n[\/vc_column_text]<div class=\"divider-wrap\"><div style=\"height: 15px;\" class=\"divider\"><\/div><\/div>[nectar_btn size=&#8221;large&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; url=&#8221;https:\/\/visuallease.com\/request-demo\/&#8221; text=&#8221;Schedule a Demo&#8221;][\/vc_column][\/vc_row][vc_row type=&#8221;full_width_background&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;light&#8221; text_align=&#8221;left&#8221; top_padding=&#8221;2%&#8221; bottom_padding=&#8221;2%&#8221; enable_gradient=&#8221;true&#8221; color_overlay=&#8221;#032e42&#8243; color_overlay_2=&#8221;#0065a3&#8243; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;1&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<h2><span style=\"color: #de5626\">How does ASC 842 effect journal entries?<\/span><\/h2>\n<p>Due to the new standards, all leased assets (except short-term leases, 12 months or less) are required to be recorded on the balance sheet as an asset and liability.<\/p>\n<p>To determine the proper lease accounting treatment within the journal entries, leases must be classified as an <strong>operating lease<\/strong> or a <strong>finance (formerly capital) lease<\/strong>.[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; top_padding=&#8221;2%&#8221; bottom_padding=&#8221;2%&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;]<div class=\"iwithtext\"><div class=\"iwt-icon\"> <img decoding=\"async\" src=\"https:\/\/visuallease.com\/wp-content\/uploads\/2019\/01\/icons8-lease-64.png\" alt=\"icon\" \/> <\/div><div class=\"iwt-text\"> \n<h4>Operating Leases:<\/h4>\n<p>A lease that provides lessee with control over use of underlying asset without ownership <\/div><div class=\"clear\"><\/div><\/div>[vc_row_inner column_margin=&#8221;default&#8221; text_align=&#8221;left&#8221;][vc_column_inner column_padding=&#8221;padding-2-percent&#8221; column_padding_position=&#8221;all&#8221; background_color=&#8221;#d2d0cf&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<p style=\"text-align: center\"><span style=\"color: #0065a3\"><strong>ASC 840<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000\">Unrecorded obligations<\/span><\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=&#8221;padding-2-percent&#8221; column_padding_position=&#8221;all&#8221; background_color=&#8221;#b8ccd6&#8243; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<p style=\"text-align: center\"><span style=\"color: #282828\"><strong>ASC 842<\/strong><\/span><\/p>\n<ul>\n<li>Recorded on balance sheet as ROU asset and lease liability<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; equal_height=&#8221;yes&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;]<div class=\"iwithtext\"><div class=\"iwt-icon\"> <img decoding=\"async\" src=\"https:\/\/visuallease.com\/wp-content\/uploads\/2019\/01\/icons8-fund-accounting-64.png\" alt=\"icon\" \/> <\/div><div class=\"iwt-text\"> \n<h4>Finance Leases:<\/h4>\n<p>A lease that is effectively a purchase agreement <\/div><div class=\"clear\"><\/div><\/div>[vc_row_inner column_margin=&#8221;default&#8221; text_align=&#8221;left&#8221;][vc_column_inner column_padding=&#8221;padding-2-percent&#8221; column_padding_position=&#8221;all&#8221; background_color=&#8221;#d2d0cf&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<p style=\"text-align: center\"><span style=\"color: #0065a3\"><strong>ASC 840<\/strong><\/span><\/p>\n<ul>\n<li>Recorded on balance sheet as Capital Lease Asset and Capital Lease Liability<\/li>\n<li>Residual Value Guarantee included in minimum lease payments<\/li>\n<li>Probable amount owed not considered<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=&#8221;padding-2-percent&#8221; column_padding_position=&#8221;all&#8221; background_color=&#8221;#b8ccd6&#8243; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<p style=\"text-align: center\"><span style=\"color: #282828\"><strong>ASC 842<\/strong><\/span><\/p>\n<ul>\n<li>Recorded on balance sheet as ROU Asset and Lease Liability<\/li>\n<li>Residual Value Guarantee only used in lease type test<\/li>\n<li>Probable amount owed used in minimum lease payments<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<h2>Visual Lease automates ASC 842 journal entries.<\/h2>\n<p>Our robust <a href=\"https:\/\/visuallease.com\/software\/lease-accounting\/\">lease accounting software<\/a> collects the information you need to make lease accounting journal entries easier.<\/p>\n[\/vc_column_text]<div class=\"divider-wrap\"><div style=\"height: 10px;\" class=\"divider\"><\/div><\/div>[vc_column_text]\n<h3>Collect data<\/h3>\n<p>Visual Lease is configurable to capture and track journal entry sub types required for financial and operating reporting, including FASB\/IFRS calculations. Examples of journal entry sub types available for output within the Visual Lease platform include, but are not limited to:[\/vc_column_text][vc_row_inner column_margin=&#8221;default&#8221; top_padding=&#8221;2%&#8221; text_align=&#8221;left&#8221;][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<ul>\n<li>Accumulated Depreciation<\/li>\n<li>Accrued Rent<\/li>\n<li>Amortization Expense<\/li>\n<li>AP\/Cash<\/li>\n<li>ASC 420 Exit or Disposal Cost Obligations<\/li>\n<li>Asset Value &#8211; Gross<\/li>\n<li>Clearing Account<\/li>\n<li>Deferred Rent<\/li>\n<li>Gain and Loss on Remeasurement<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/2&#8243; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<ul>\n<li>Indirect costs<\/li>\n<li>Interest Expense<\/li>\n<li>Lease Expense<\/li>\n<li>Lease Incentives<\/li>\n<li>Lease Liability<\/li>\n<li>Prepaid Rent<\/li>\n<li>Retained Earnings<\/li>\n<li>ROU Asset<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; top_padding=&#8221;2%&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n<h3>Report and export data<\/h3>\n<p>Users can easily report and export reports on data from within Visual Lease\u2019s platform by:<\/p>\n<ul>\n<li><strong>FASB Journal Entry Summary Report:<\/strong> Captures journal entries resulting from calculations made in the FASB\/IASB module across your lease portfolio. You can view the journal entries for a single lease or across multiple records.<\/li>\n<li><strong>Output to GL Feeds:<\/strong> Accounting feeds for GL entries can be configured to output journal entries required for reporting as well as other values from FASB\/IFRS calculations.<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]\n[\/vc_column_text][\/vc_column][\/vc_row]\n","protected":false},"excerpt":{"rendered":"<p>[vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;center&#8221; top_padding=&#8221;2%&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text] The new Financial Accounting and Standards Board (FASB) lease&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":1543,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"content-type":"","footnotes":"","_links_to":"","_links_to_target":""},"class_list":["post-1889","page","type-page","status-publish","hentry"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/pages\/1889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/comments?post=1889"}],"version-history":[{"count":0,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/pages\/1889\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/pages\/1543"}],"wp:attachment":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/media?parent=1889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}