There is a company vehicle that was financed on the Fleet Manager's personal credit. I'm not clear if it was his personal vehicle prior to being put in the fleet or not. The company assumed the monthly payments in January of this year. The prior accountant just classified the payments as a fleet expense. That doesn't seem right to me. What's the best way to handle this. I do not get monthly statements and have no idea how much is left on the loan.
Vehicle Loan on employee's credit
Answers
Hello -
Assuming this is classified as an operating lease the expense should be recognized on the books on a straight line basis.
You may wish to ensure that the lease obligation is no longer in the employee's name. If it is there is a possibility that this would be considered compensation for the employee.
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Accounting