UK Accounting for rent free period

Mar 11, 2013
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Im trying to figure out entries for rent free period but stuck!!

Rent is £42k per annum for 3 year lease with 2 months rent free. The lease is from 14th October, I have received an invoice for the rental income from 14th Dec to 24th Dec for £1265.75.

I know that £3305.56 need to charged to the p&l every month (£3500-£194.44).

Am I correct in thinking I should charge £6611.12 (2 months) to the p&l then for 34 month reduce rent by £194.44? What about accounting for the 14th Dec to 24th rent free period?


Unsure as to if I should accrue £7k for the 2months & release that over 34 months.

Any hello would be appreciated.



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Jan 6, 2013
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United Kingdom
Make life easy for yourself and just spread the cost evenly over the course of the lease. The 2 months free rent per annum is neither here nor there in terms of accounting for the lease - you're still occupying the premises 12 months of the year, so you just spread whatever the actual cost to you is for the year over 12 months (or you could even take that down as far as a calculation of per day, and account for accordingly). No need to concern yourself with the 2 months free - that's an accounting issue for the lessor, not you.
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