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Accounting Treatment Of Royalty In The Books Of Lessor

The Best of Brian Tracy
Accounting Entries In The Books Of Lessor:

A. When Royalty Is Less Than The Minimum Rent:

Without maintaining minimum rent account:

1. For the actual royalties:
Lessee's A/C...................Dr.
To Royalties A/C
To Shortworking A/c


2. For due amount received:
Bank A/C...............Dr.
To Lessee A/C

3. For royalties transferred:
Royalties A/C...........Dr.
To profit and loss A/C

With maintaining minimum rent account:

1. For minimum rent receivable:
Minimum rent A/c......................Dr.
To royalties A/C
To Shortworking A/C

2. For minimum rent due:
Lessee's A/C................Dr.
To minimum rent A/c

3. For due amount received:
Bank A/C....................Dr.
To Lessee's A/C

4. For Royalties transferred:
Profit and loss A/C...............Dr.
To Royalties A/C

B. When Royalty Is Less Than Minimum Rent:

1. For royalties due:
Lessee's A/C....................Dr.
To Royalty A/C

2. For shortworking recouped and royalty received:
Bank A/C...................Dr.
Shortworking A/C....Dr.
To Lessee's A/C

3. For royalty and unrecouped shortworking transferred:
Royalties A/C...............Dr.
Shortworking A/C........Dr.
To profit and loss A/C

C. When Royalty Is Equal To The Minimum Rent:

1. For the actual royalties:
Royalties A/C............Dr.
To landlord A/C

2. For the amount paid:
Landlord A/C...........Dr.
To Bank A/C

3. For transferring royalties:
Profit and loss A/C..........Dr.
To Royalties A/C

Related Topics
Accounting Treatment Of Royalty In The Books Of Lessee
Concept And Meaning Of Royalty
Meaning Of Terms Used In Accounting For Royalties

Goal Mastery For Personal And Financial Achievement

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