by Gregg Johnson
(San Jose, CA USA)
We have leased equipment. The lessee has paid us $50000 against the total amount of the equipment, which is $550,000.
They will lease the equipment from us over three years after which time they will purchase the equipment for $1.00.
The principal lease amount is $500,000. We are borrowing $500,000 to pay for the equipment. The lease payment will include 1/36 of the principal amount plus interest.
The interest we are charging has a coverage of 1.2 over the interest we will be charged.
My question is to what GL accounts do I post the following?:
1) The $50k payment
2) The monthly income from the lease payment
Thanks.
Gregg Johnson
How does QB track this line item - does this number stay the same over years, go down trying to read a report and understand it.
by Ben
(SINGAPORE)
Hi !
How to record if I purchase Office Equipment in 2005 @ $350,After 2010, My supplier offer me to trade in old vehicle and paid only $50 to get new Office Equipment
Purchased computer for $3,300.00 Inc GST, traded in old computer for $220.00 Inc GST, obtained bank loan for difference . How do I enter this in my General Journal?
by Carol
(NJ)
What kinds of things are usually reported under property, plant and equipment?
Assets that are used in the business are reported as Property, plant and equipment on the balance sheet. These assets include things like buildings, land, office equipment, vehicles, machinery, furniture and fixtures.
Additionaly, accumulated depreciation of these assets is found on the balance sheet under property, plant and equipment. These assets are also often described as plant assets or fixed assets.
Learn more about the Balance Sheet and the types of accounts reported there.
by Steph
(Hawaii)
As to purchasing equipment, when I write the check for anything over $500.00 I want in as a fixed asset. What are the steps to doing this. I thought I write a check to fixed asset , but it then doesn't show in my P&L for the month.
What am i missing here?
Thanks
Steph
Hi Steph,
Good question. You are correct that when purchasing assets over $500, you will post to the Asset account (by crediting the Bank account and debiting the Asset account).
This transaction will not show on the P&L for the month as both of the accounts affected are Balance Sheet accounts. Therefore, you will find the transaction on the month end balance sheet instead.
Then at the end of year, you will post an adjusting entry to expense the depreciation on the asset. If you were to take a section 179 deduction, you would credit the entire $500 to the accumulated depreciation account (subdirectory of the asset account) and debit the depreciation expense account. At which point it would show up on the end of year P&L statement.
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