Lease accounting with an interest-free deposit

Details for lease accounting

Let us assume the following details for lease accounting:

Lease start date: 1-Apr-2019

Lease end date: 31-Mar-2024

Lease payments: Rs. 2,75,000

Lease Deposit: Rs. 3,00,000

Payment frequency: Annual – payable at the end

Incremental borrowing rate: 9%

Right-of-use

Recognition of Lease liability

Amortisation of Right-of-use

Finance cost

Interest free deposit

Imputed interest income

Amortisation of Right-of-use

Trial balance

Profit and Loss Account

Balance Sheet