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Level 1

How to Record "Lease to Own" Computer asset

We recently purchased a few computers but we are leasing to own over 48 month period. I am having trouble balancing the JE for the monthly payments.

I have put the original purchase price (total asset amount) into a "Lease Obligations" account. Then each month I have set up a JE to credit the Lease Obligation and Debit the "Computer Asset" Account. Where I am having trouble is balancing the actual payment that will come out of our account. Say it's $50, $50 will be credited to our bank account but I dont know where the debit should go.

If I put it back into lease obligations the total Lease will never decrease and if I put it in Computer asset it will double the amount.

any help would be apppreciated!

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