Capital Lease Account

Hi,

Thanks for all your help and the site's help! I've gone through and figured out a few different things.

I figured out that we are doing a capital lease on two items, now I need help on how to record them in QuickBooks. Do they just go into the fixed assest area? Do I put in the total amount that we will pay and then treat the montly amount paid as if it were a bill payment towards the company?

Thank you very much!

It delights me that you are finding this site useful and practical! :0)

It sounds like you discovered my chat on Capital Leases. There was mention in the chat on the bookkeeping entries required for a capital lease that I think will answer your question.

Post back if it doesn't or it raises more questions for you.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for Capital Lease Account

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Feb 18, 2011

still need more help please
by: Sharon

Thank you, I understand the first part now, but with quick books I'm still confused.

Do I put in the total amount that we will pay and then treat the montly amount paid as if it were a bill payment towards the company?

Thanks.

Feb 18, 2011

Loan Manager
by: Lake

It depends how you decide to setup your liability.

If you use QuickBooks Loan Manager, you will use the loan manager.

If you setup the liability using a journal entry, then you would setup a memorized transaction to post as a recurring payment using "Write Cheques". You would not let it post automatically but come up with a reminder. Each month, you would edit the split for interest and principal prior to posting it.

A third option would be to setup the liability using a journal entry, then use Enter Bills to pay the lease as you suggest. You would code the bill to the lease payable account you setup in long term liabilities. You would then use Pay Bill to make the actual lease payment. This allows you to see the most recent bill received for the lease payment in your Accounts Payable Aging Summary, and show the remainder of your lease outstanding in your long term liability account.

So it is your preference. The third option will probably require an yearend adjusting entry to expense the interest portion of the payments that were posted to the lease liability account.

May 22, 2016

HST on Capital Lease
by: Lynda

If you purchased equipment on a term, with a downpayment and a buyout at the end of this term, can you expense the HST paid (ITC) on that downpayment or does it have to be prorated?

May 22, 2016

Lynda
by: Lake

You can find the entries for booking GST/HST related to a lease here:

https://www.bookkeeping-essentials.com/bookkeeping-entries.html#caplease

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