22 April 2010
Suppose a private limited company takes a plot of land on lease for 90 years by paying 1400000/- as per lease agreement, which is 70% of the lease rent for the period of 90 years. After the expiry of the period land will be returned to the lessor. The lessee will have to make the remaining payment of lease rent over a period of 2 years in equal installments. How will the transaction reflect in the balance sheet and P&L A/c. What amount will be debited in P&L A/c?
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