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Level 1

How to record purchase of fixed asset in Quickbooks?

Asset is an Accounting Software (Quickbooks) 

Payment made from a personal bank account

I want it to be depreciable and I want to learn how to set depreciation rates for different assets

Solved
Best answer 09-27-2019

Best Answers
Highlighted
Level 15

How to record purchase of fixed asset in Quickbooks?

use a cash type bank account and make a deposit, use owner equity investment as the source of the deposit

create the Fixed asset type account in the chart of accounts and name it, create a sub fixed asset account named accumulated depreciation-asset name

Use the cash type bank account and enter the purchase, use the fixed asset account as the expense (reason) for the purchase

depreciation is a manual calculation and how much it is will depend on your coutries regulations in this area, when have the amount do a journal entry

debit depreciation expense
credit accumulated depreciation-asset name

View solution in original post

3 Comments
Highlighted
Level 15

How to record purchase of fixed asset in Quickbooks?

use a cash type bank account and make a deposit, use owner equity investment as the source of the deposit

create the Fixed asset type account in the chart of accounts and name it, create a sub fixed asset account named accumulated depreciation-asset name

Use the cash type bank account and enter the purchase, use the fixed asset account as the expense (reason) for the purchase

depreciation is a manual calculation and how much it is will depend on your coutries regulations in this area, when have the amount do a journal entry

debit depreciation expense
credit accumulated depreciation-asset name

View solution in original post

Highlighted
Level 1

How to record purchase of fixed asset in Quickbooks?

Thanks for the great answer Rustler,

 

Can you please kindly help me understand this approach better?

So, I have an owner's equity account and an asset account. When I purchase an asset and using QBO terminology, the "Payee" would be the asset account, and "Payment Account" would be the owner's equity account. (If I have understood this correctly).

Assuming the previous statement is correct, how to you track the actual payee? For example, I buy a car and pay $20,000 to Toyota, but to track the assets, I use the assets account as payee and not the Toyota. How do you bring the vendor into the picture so that in future I can run a report on how much I have paid to Toyota?

 

Many thanks,

Highlighted
Level 15

How to record purchase of fixed asset in Quickbooks?


@NORDHYVE wrote:

Thanks for the great answer Rustler,

 

Can you please kindly help me understand this approach better?

So, I have an owner's equity account and an asset account. When I purchase an asset and using QBO terminology, the "Payee" would be the asset account, and "Payment Account" would be the owner's equity account. (If I have understood this correctly).

Assuming the previous statement is correct, how to you track the actual payee? For example, I buy a car and pay $20,000 to Toyota, but to track the assets, I use the assets account as payee and not the Toyota. How do you bring the vendor into the picture so that in future I can run a report on how much I have paid to Toyota?

 

Many thanks,


If you re-read my answer, I never mention equity accounts.  Equity is (95%) of the time an automatic math function and you do not mess with it.

 

You enter a payment to the Toyota place (vendor), in the expense account section you list the fixed asset account you first created for the car, enter the amount paid.