accounting for new HVAC system under finance

USA Discussion in 'General Accountancy Discussion' started by AGH the CPA, Jun 11, 2018.

  1. AGH the CPA

    AGH the CPA

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    Our company got a new HVAC system under a financing deal

    sample numbers rounded for ease

    yield 6%
    amount $80,000
    monthly payment $1500
    advance payment (first and last 2 months) $4500
    documentation fee $300

    Best way to account for this? It is a capital improvement right? We don't own our building though...
     
    AGH the CPA, Jun 11, 2018
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  2. AGH the CPA

    kirby VIP Member

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    Capital improvement - yes!
    If you are in a building you don't own, then you are likely leasing the space. So capitalize this as a "Leasehold Improvement."
     
    kirby, Jun 12, 2018
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