The renovation expenses of hotel restaurants are generally amortized for more than one year, which can be handled by long-term prepaid expenses in accounting. What are the relevant accounting entries?

How to make accounting entries for hotel restaurant decoration expenses?

Borrow: Long-term deferred expenses

Taxes payable-VAT payable-input tax

Bank deposits, etc

Debit: management expenses-amortization of long-term deferred expenses

Loan: Long-term deferred expenses

Is the decoration fee amortized this month or next month?

Decoration expenses are amortized in the following month and included in the "long-term deferred expenses" subject.

According to Article 70 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC): "Other expenses mentioned in Item (4) of Article 13 of the Enterprise Income Tax Law shall be regarded as long-term deferred expenses, which shall be amortized in installments from the month after the expenses occur, and the amortization period shall not be less than 3 years."

Accounting treatment of long-term deferred expenses;

(1) occurs

Borrow: Long-term deferred expenses

Loans: bank deposits

(2) When amortizing

Borrow: management fee

Loan: Long-term deferred expenses

What are the long-term prepaid expenses?

Long-term deferred expenses refer to the expenses that the enterprise has spent, but the amortization period exceeds 1 year (excluding 1 year), including start-up expenses, expenditure on improvement of leased fixed assets, expenditure on major repairs of fixed assets with amortization period exceeding 1 year, and stock issuing expenses.

Characteristics of long-term deferred expenses:

(1) Long-term deferred expenses shall be amortized evenly by stages during the benefit period;

(2) Long-term deferred expenses have no value and cannot be transferred;

(3) Long-term deferred expenses have the nature of collective expenses.