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Level 1

Record equipment bought by using loaned money

I got some loan from the bank and then bought some equipment. Bank paid the money directly to the vendor. how I record this transaction? Or I just recorded this transaction as the same way as I bought this equipment using my own money? Thanks

3 Comments
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Community Champion

Record equipment bought by using loaned money

Since you now have a loan and the equipment, +journal entry

 

debit equipment (asset)

credit loan (liability)

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Anonymous
Not applicable

Record equipment bought by using loaned money

Hey @lynda,

 

In lieu of a journal entry, could @sunshinesmile also use the Bank Deposit feature to create a liability loan account, and then make a separate asset account for "equipment," and deduct the asset totals from the original liability account? 

 


  • Liability account - Loan ($ 500) 
  • Asset account - Equipment ($0)

@sunshinesmile buys equipment item for $100, the item is added to the asset account and deducted from the loan total?

 

  • Liability account - Loan ($ 400) 
  • Asset account - Equipment ($ 100)

 

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Community Champion

Record equipment bought by using loaned money

Hi @Anonymous:

 

 Maybe I’m missing where the deposit would come into play?  

 

If you make it deposit, you’re putting money into the bank.

 

Did you mean a +check entry? You could do it there. Although it’s not standard to Use + write check for  an asset purchase with a loan.   

 

But  that would work as you described.

 

If that’s not what you meant, let me know.   :)

 

lynda

 

 

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