Operating vs finance lease journal entries examples

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Better understand the typical journal entries found with an operating lease and a finance lease under ASC 842, as well as the financial statement impact of those journal entries with this tool.

Financial comparison spreadsheet illustrating examples of journal entries for Operating and Finance leases under Procedure #4. The document includes sections for the Income Statement and Balance Sheet, with detailed entries for Revenue, COGS, Gross Income, various expenses including Lease Expense, and the net impact on EBITDA and Net Income. The Balance Sheet section displays the calculations for Net Operating ROU and Net Financing ROU assets. It contrasts the initial and January journal entries for both lease types, showing debits and credits for items like ROU Assets, Lease Liability, and Cash/Lease Payable. Color-coded annotations highlight significant figures and procedures, aiding in distinguishing between the accounting treatments of the two types of leases.

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