I bought a 10k piece of equipment that i'm leasing for $217 a month. do i just start categorizing each months payment or do i enter the entire purchase amount anywhere?

It depends on the kind of lease, or is it just a payment plan.

If you keep the equipment at the end of the lease. then you create a liability account for the full amount of the loan/lease and the other side is a debit to the fixed asset account you create for the equipment.

You pay down the liability.

To expand on what @Rustler said: here's the IRS guidance on determining the type of lease you have.

Question:

If you lease-purchase a piece of equipment for use in a trade or business, like a forklift or truck, do you deduct the lease payments or do you depreciate the cost of the equipment?

Answer

You must first determine whether your agreement is a lease or a conditional sales contract. If the agreement is a lease, you may deduct the payments as rent. If the agreement is a conditional sales contract, you consider yourself as the outright purchaser of the equipment. You may generally recover the cost of such property used in a trade or business through depreciation deductions.

Whether the agreement is a lease or a conditional sales contract depends on the intent of the parties as evidenced by their agreement, which is read in light of the facts and circumstances when it was entered into. Determine the parties' intent based on the facts and circumstances that exist when you enter into the agreement. No single test, or special combination of tests, always applies.

However, in general, you may consider an agreement as a conditional sales contract rather than a lease if one or more of the following conditions apply:

• The agreement designates part of each payment towards an equity interest that you'll receive in the property.
• You get title to the property upon the payment of a stated amount of "rental" payments required under the agreement.
• The amount you must pay to use the property for a short time is an inordinately large part of the amount you would pay to get title to the property.
• You pay much more than the current fair rental value for the property.
• You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Determine this value when you enter into the agreement.
• You have an option to buy the property for a small amount compared to the total amount you have to pay under the agreement.
• The agreement designates some part of the payments as interest, or parts of the payments are easy to recognize as interest.