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Thread: Long Term Portion on Vehicle Lease Agreement

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    Long Term Portion on Vehicle Lease Agreement

    Can you please help me. I need some advice on how to determine the Long Term Portion (LTP) on vehicle lease agreement. I am new at this sort of entries and would really like to know how to do the entry.

    I received the amortization schedule from the bank with the following:
    total for current period: Capital R16172.63 , finace charges R7766.75 and Finance Adjustments R201.86 - As far as I could work out the Finance charges that I can enter for the current period is R7766.75 less the adj of R201.86 = R7564.89. Am I correct?
    But further than that I really am feeling quite helpless.

    Amounts due next 12 periods: Capital r17995.52, finance Charges R5828.72 and finance Adjustments R147.92.

    Then there is another line: Amounts due thereafter: 28 installments: Capital R49701.32, Finance Charges R5825.21 and finance Charge adj - R408.51.

    Will really appreciate your help. What is the meaning of Long term portion?

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    Site Caretaker Dave A's Avatar
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    The current portion of a long term liability is the portion of the debt payable within the next 12 months.
    The long term portion of a long term liability is the portion of the debt payable after 12 months (total liability-current portion).

    As far as I could work out the Finance charges that I can enter for the current period is R7766.75 less the adj of R201.86 = R7564.89. Am I correct?
    I don't know. Is the adjustment increasing or decreasing the total liability? If it is increasing the total liability, I expect you should add it to the finance charges.

    I've run out of time to get the balance of my post up to speed - will come back later if you're still stuck.
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