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How do you adjust straight line amortization of deferred rent when lease is extended?
Wiki User
∙ 11y ago
I am not entirely positive. But I believe you would take the balance of the deferred rent liability at relating to the lease prior to expansion and amortize it over the remaining life of the new lease.
If deferred rent liability was 10k as of 10/31/2011 and you extended the lease term for two years ending 12/31/2013 you would calculate the new straightline expense of the lease at time of the extension through the end of the lease term and determine the deffered rent liability as of 12/31/2011.
Then add 10K/24 = 417X 2 = 834 to the 12/31/2011 deferred rent balance of the new lease
You are debiting the deferred rent liability and crediting expense to decrease the deferred rent liability associated with the old lease.
Wiki User
∙ 11y ago
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