> ## Documentation Index
> Fetch the complete documentation index at: https://docs.spacebaseapp.com/llms.txt
> Use this file to discover all available pages before exploring further.

# From setup to month-end close

> Work through a lease example, approve its accounting, and reconcile the first month's entries and balances.

This example follows a new ASC 842 operating lease from setup through its first close. Use it alongside your company's approval and GL posting process.

## Example inputs

| Input          | Value                                                                                       |
| -------------- | ------------------------------------------------------------------------------------------- |
| Lease term     | January 1, 2027 through December 31, 2028                                                   |
| Rent           | \$1,000 monthly, paid at month end                                                          |
| Discount rate  | 6% annually; 0.5% monthly                                                                   |
| GL start date  | January 1, 2027                                                                             |
| Classification | Operating, assuming the classification assessment supports it                               |
| Other items    | No incentives, prepayments, initial direct costs, nonlease components, or other adjustments |

The example uses full months, a single currency, and no modifications. Different payment timing or additional balances will change the results.

## 1. Create the lease and accounting snapshot

Follow [Lease abstraction](/leases/abstraction) to enter the contract dates and 24 monthly payments. Publish the lease, then open its draft accounting lease in **Needs Review**.

In the [accounting wizard](/accounting/leases#how-do-i-create-the-first-snapshot-of-my-accounting-lease), select the asset class, enter the dates and 6% discount rate, and confirm that payments fall at month end. Leave transition and additional balances at zero for this example. Review the classification questions, select the supported classification, and create the snapshot.

Map the ROU asset, current and non-current lease liabilities, lease expense, and cash to your [GL accounts](/accounting/chart-of-accounts).

## 2. Check initial recognition

The present value of 24 month-end payments at 0.5% monthly is approximately **\$22,562.87**. With no other adjustments, the starting ROU asset is the same amount.

| Account                                           | Debit       | Credit      |
| ------------------------------------------------- | ----------- | ----------- |
| ROU asset                                         | \$22,562.87 |             |
| Lease liability, current and non-current combined |             | \$22,562.87 |

Spacebase splits the liability between current and non-current accounts according to your company's current-liability calculation setting. Reconcile their combined balance to the amortization schedule.

## 3. Review and approve

Claim the accounting lease, select **Lease Actions > Submit for approval**, and have the reviewer check the contract, payment schedule, account mappings, and recognition amounts. Approve it from the **Reviewed** tab when review is complete.

Only approved accounting leases flow into accounting reports and automated journal entries. Resolve any **Needs Review** leases before relying on the portfolio totals.

## 4. Reconcile January

For this operating lease, January lease expense is **\$1,000**. The interest component is approximately **\$112.81** (\$22,562.87 × 0.5%), and the ROU amortization component is approximately **\$887.19** (\$1,000 − \$112.81).

| Check at January 31    | Expected amount |
| ---------------------- | --------------- |
| Cash payment           | \$1,000.00      |
| Lease expense          | \$1,000.00      |
| Ending lease liability | \$21,675.68     |
| Ending net ROU asset   | \$21,675.68     |

These are rounded check figures. The operating lease's interest component explains the liability movement; it is not a separate finance-lease interest expense in this example. Exported entries may separate asset amortization, accumulated amortization, payments, and current/non-current transfers.

Use the **Journal Entries** report for January to review the posting amounts. Use **Lease Amortization Schedule** to confirm the monthly movement, and **Portfolio Amortization Schedule Values** to compare January 31 balances across approved leases.

## 5. Complete the portfolio close

* Run **Real Estate Leases Check** to identify lease-administration records without an accounting lease. Investigate whether each needs accounting recognition.
* Review newly published leases, modifications, expirations, and additional costs for the period.
* Run **Roll-Forward Report** and confirm beginning balances plus period activity equal ending balances.
* Compare **GL Reconciliation Report** and **Balance Sheet** to the posted GL using the same date, standard, entity scope, and currency.
* Resolve differences, then export or post through your established process. Check whether cash entries are included so payments already posted through AP are not duplicated.
* Save the final reports and review evidence. After approval of the close, update the **Accounting lock date** under [Accounting settings](/accounting/settings) according to your company's process.

For quarterly or annual reporting, run **Disclosure Requirements** for the appropriate standard and period. See [Reports](/reports/overview) for guidance on selecting reports and investigating differences.