Hi Reading Book,
Yes. Your logical is correct if a lump sum HST/GST paid at the start of the lease. If so, your first and second entry might not be correct either as HST (input tax credit) can be claimed whenever you paid. So HST receivable (total amount you paid on this lease) should be recorded in the first entry. But you cannot claim any HST later.
But Susan said that they only pay HST with the monthly payment not a lump sum at the start. - (----this is normal business practice), so HST should be recorded each time when you paid --- did I misunderstood Susan’s question?
Thanks,
Yes. Your logical is correct if a lump sum HST/GST paid at the start of the lease. If so, your first and second entry might not be correct either as HST (input tax credit) can be claimed whenever you paid. So HST receivable (total amount you paid on this lease) should be recorded in the first entry. But you cannot claim any HST later.
But Susan said that they only pay HST with the monthly payment not a lump sum at the start. - (----this is normal business practice), so HST should be recorded each time when you paid --- did I misunderstood Susan’s question?
Thanks,