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How do I account for an asset that was leased?

Assets / Leases

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My company have leased a portacabin for several years.  We have recently decided that we could not warrant paying for the cabin any longer based on its current level of use and cancelled the lease asking the supplier to collect.  After discussion with the supplier it was decided for one reason or another that we would keep the cabin as an asset for a last one off, small fee.

How do I now account for this cabin in the fixed asset register?  What would be the journal entries required and what value would I use for the asset?

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By Duggimon
14th Aug 2019 11:15

Since it's essentially worthless to both you and the seller I would probably just include it at cost based on the small fee and not worry about it further.

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By paul.benny
14th Aug 2019 13:56

Or even just expense the payment - although it may get added back for tax purposes.

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