If you have a business that rents personal tangible property to end user in periods less than 1 year how do you handle inventory. It seems that you would need to match the income with the cost of goods sold over the period of the rental contract.
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You have a sale. All associated costs (COGS) are recorded at that time. Profit is recognized on the sale of the item(s).
Journal entries would be: CR Sales DR Cash DR Account Receivable. CR Inventory DR COGS
You can not do installment sale accounting. Gains are recognized when the sale is made.
You have whatever cash they pay at the time of the sale. You have a receivable for the balance.
You collect payments on that sale. Part of what they pay is interest.
Journal entries would be: DR Cash CR Account Receivable CR Interest Income
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