Do I claim the full GST amount at starting point or every month with the payment?
By Hank Bulmash | May 31, 2013
Part 1: I've started my bookkeeping business in Saskatchewan and need to figure out proper capital lease record for my client. Client leased equipment from leasing company for 40 month with buyout option of 10 per cent of a value. Monthly payment include principal plus interest plus GST plus PST. My starting point is DR equipment CR capital lease obligation. Do I claim the full GST amount at starting point or every month with the payment?
Part 2: Do I capitalize PST amount? If yes, do I treat them as an addition to the equipment every year with 1/2 for depreciation.
Hank Bulmash answered:
Part 1: Every month with the payment.
Part 2: No -- record it each month with the payment.