PC Community, can you share with me the appropriate way to account for a new vehicle fixed asset into V11.5, as well as the subsequent loan payment entry?
Thanks in advance
Accounting Setup for New Vehicle and subsequent loan payment
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Matt
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Re: Accounting Setup for New Vehicle and subsequent loan pay
Using the following assumptions, here are the accounting entries you would make.
1). Vehicle purchase - assume cost of vehicle $20,000.00. Assume paid for with a $5,000.00 down payment from the checking account and a $15,000.00 loan
Debit Fixed Assets - Vehicles $20,000.00
Credit Checking Account $5,000.00
Credit Vehicle Loan (Liability) $15,000.00
2). Loan payment - assume the payment is $300.00, of which $50.00 is interest and $250.00 is principal.
Debit Interest Expense - Vehicle Loan $50.00
Debit Vehicle Loan (Liability) $250.00
Credit Checking Account $300.00
Please note that the amounts to interest and principal will change each month.
1). Vehicle purchase - assume cost of vehicle $20,000.00. Assume paid for with a $5,000.00 down payment from the checking account and a $15,000.00 loan
Debit Fixed Assets - Vehicles $20,000.00
Credit Checking Account $5,000.00
Credit Vehicle Loan (Liability) $15,000.00
2). Loan payment - assume the payment is $300.00, of which $50.00 is interest and $250.00 is principal.
Debit Interest Expense - Vehicle Loan $50.00
Debit Vehicle Loan (Liability) $250.00
Credit Checking Account $300.00
Please note that the amounts to interest and principal will change each month.