How to Account for Leasehold Improvements Payable
Leasehold improvements payable is a long-term liability account that captures debt you created to pay for renovations in location your company has rented. The payable may capture debt from one or multiple sources. You will place the money on your balance sheet on two separate lines.
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Instructions
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1
Review the terms and conditions of the loans associated with your leasehold improvements. Note the lengths and principal amounts of the loans.
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2
Input the principal balance of the loans contributed to leasehold improvements that you will pay over the next 12 months under your current liabilities column of the balance sheet. Label this row "current portion of leasehold improvements payable."
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3
Input the remaining principal balance of leasehold improvements payable under the long-term liabilities column of the balance sheet. Label this row "long-term leasehold improvements payable."
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Tips & Warnings
The leasehold improvements payable amount should be equal to or less than a leasehold improvements entry in long-term assets to maintain balance on the balance sheet.
Capture accrued interest under the line item "interest payable."
