by Jan
(Thunder Bay, ON)
Bookkeeping Entries for
Purchasing a Financed Company Vehicle
I used QuickBooks Pro 2010 and could not find any answer from the community. Appreciate if anyone can help.
The company just purchased a vehicle worth $35,710.50 with a $1,000 down payment. HST is $4,830.61 and Interest $8,982.57 for loan of $39,541.11.
I recorded the intial purchase as follows:
DR Fixed Assets-Truck $34710.50 ($35710.50 less $1000)
DR HST Input tax credit $4830.61
DR Asset - Interest Deferred $8982.57
CR Liability - Truck Loan $48,523.68
Now I need to make a payment of $673.74 (including hst and interest) to the finance company. I issued the cheque as follows:
Under Account-Liability, Truck Loan $482.09 (principal)
Under HST $67.09 (which I derive from $4,830.61 divide by 72 payments)
Under Asset - Interest Deferred $124.76 ($8982.67 divide by 72 payments)
When I post the cheque - the truck loan account decreases by $482.09 - which I believe IS right but the HST and interest deferred account increases - which I believe IS wrong.
Appreciate if someone can give guidance.
Thanks
Jan - Thunder Bay, ON
Comments for Posting Payment to Vehicle Loan
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