Real Estate
Lease Incentive (Rent-Free Period)
Accounting for a 12-month lease where the first 2 months are free.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Rent Expense | Expense (+) | 1,000.00 | - |
| Lease Incentive Liability | Liability (+) | - | 200.00 |
| Cash | Asset (-) | - | 800.00 |
💡 Accountant's Note
To follow the accrual basis, you must spread the total cost of the lease over the whole year. Even in 'free' months, you record a portion of the expense.
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