getting back to basics here... I'm struggling and questioning myself because of all the mistakes I'm finding in the accounting for the company I'm currently at on mat leave coverage. I'd like someone to confirm the following entry for the monthly lease payments for a capital lease of a vehicle dr. vehicle lease liability dr. deductible sales tax (GST here in Canada) dr. admin expense re: Provincial Sales Tax (PST) portion of monthly payment cr. cash What I'm really interested in is the PST portion treatment... is the PST just expensed each month to auto expense or another G&A account? The PST portion of the lease was not financed and so it was not capitalized at the time of entering the capital lease.
treatment of non-deductible sales tax on monthly lease payment (capital lease)
Answers
Since you are paying PST to the leasing company, and assuming you can't clawback the PST as an overpayment, then I would just aggregate it with the auto expense entry.
Sales taxes that a company pays, IMHO doesn't need its own account or KPI, it's just part of the expense.
If you have a clawback, that changes the answer.