Adding a new asset.

[Lori T.]

We have just purchased a commericial bus for our church and paid for it in full by check. No other assets have been made a part of our accounting at this point. I need to know the correct accounting steps for adding the the bus as an asset. Will I have to set up depreciation as well? Thank you for your help.

[Matt]

First, you will need to set up the asset and accumulated depreciation accounts in your chart of accounts if they have not already been set up. Then, to post the purchase debit the asset account "Commercial Bus" and credit your checking account. To post the monthly depreciation debit depreciation expense and credit the accumulated depreciation "Commercial Bus" account.

[Lori T.]

Thank you very much for your help, Matt. It is so much better not having to go back and make corrections to what you have done when it turns out not to been the right thing.

Blessings