Fixed Assets

[dfg]

I am a contractor and just bought several pieces of heavy eqiupment. Paid
cash down and financed the balance over 60 months. How do I set this up?

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[Laura]

I am a contractor and just bought several pieces of heavy eqiupment. Paid
cash down and financed the balance over 60 months. How do I set this up?

First set up a Notes payable (long term liability), Interest expense, a
fixed asset, an accumulated depreciation (asset) and depreciation expense
accounts if they don't already exist.

Either use the Task>>Payment screen or a journal entry to:

Debit Fixed asset for amount of equipment purchased (cost)
Credit Cash
Credit Notes Payable.

When you make a payment post the following:

Debit Notes Payable for amount of principal paid
Debit Interest expense
Credit Cash

Check with your accountant as to how often and how to calculate the
depreciation associated with the equipment. When you make the entry post it
the following:

Debit Deprec expense
Credit Accumulated Depreciation

HTH,
Laura

 

[Mike Block-Tax Cut CPA]

Create a heavy equipment account under fixed assets and a Long-term
liability (Loan period 5 years) account for the Financer. Now go to the
banking menu and select make journal entry then debit the Equipment
accounts and credit the Liability account. Go to the bank menu again
and select the write check option and issue a check for initial down
payment, in this case select the liability account in the Account
column. In the same way you can pay the installments by issuing checks.
If the amount of installments remains same you can use the memorization
option for issuing checks.


Mike Block - QuickBooks Tax Cut C.P.A.
Intuit paid me to make QuickBooks better!
http://www.blocktax.com/
http://www.quickbooks-add-ons.com/