Options for entering equipment that was financed into QuickBooks. When entering equipment into QuickBooks we need to record the purchase as an asset rather then an expense. To do this we will create an account in the chart of accounts with the account type of fixed assets.
When large equipment is purchased we often have another problem for the data entry into Quickbooks. The equipment may by partially financed. In other words, we may have purchase the equipment with a loan.
When entering transaction into Quickbooks on a cash basis, from the bank statement, we will only see the portion of the equipment purchased with cash.
We have some options for recording the equipment on the books under a cash basis.
The first option, the easy option, is to just enter the equipment at the value we payed and depend on year end adjustments to record the difference. When using this option we can enter the cash payment in the check register and record the other account to a fixed asset called equipment.
Our next option is to get the loan agreement and record the equipment and the loan. We can still enter the transaction into the check register if we paid some cash, but if no cash was paid we may need to enter the transaction into QuickBooks using a journal entry.
We can enter the transaction into QuickBoosk check register by using the split function and charging the equipment account for the full purchase price and charging a loan payable for the difference between the purchase price and amount paid.
For more accounting information see accounting website.