286 Leaseholds

Assets

Fixed

Synopsis

Account 286 is established to record the purchase price of Leasehold Improvements on property leased by the dealership and used in the automobile business.

Debits

Credits

The Cost of leaseholds and of buildings situated on leased land
The Cost of improvements to leasehold and to building situated on leased land. This includes entirely new buildings, permanent improvements to existing buildings, paving, etc.

The Cost of leaseholds and buildings and improvements sold and otherwise disposed of

Example 1

Record the cost of landscaping in the amount of $15,000.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 286	Leasehold Improvements	$15,000
Account 202	Cash in Bank		$15,000

Example 2

Record the cost of constructing a new office for the sales manager on leased property in the amount of $7,500.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 286	Leasehold Improvements	$7,500
Account 300	Accounts Payable – Trade Creditors		$7,500

Comments

A debit balance represents the cost of leaseholds, buildings situated on leased land and improvements to leaseholds and buildings.