cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Record vechicle loan purchase for owner operator- truck driver

The company has purchased several trucks for its owner operator drivers (they have their own business). The loan is in the company's name which makes the monthly payments, let's say $2,000. In turn, the same amount is withheld from the driver's monthly wages. Total amount of the load deliverd gets recorded to wages, less the truck payment.

How do you record the loan transaction and driver payment?

 

I have on the monthly check to driver:

Driver wages: $3,500 Debit wages expenses

Loan John: -$2,000     Debit Loan - long term payable

 

The long term payable account currently has a debit balance of $2,000.

Since this is not a regular loan I am not recording interest expense as this is the driver's expense.

 

Thank you.

 

 

1 Comment
Highlighted
Level 15

Record vechicle loan purchase for owner operator- truck driver

The company has loan payments, some portion of that payment is interest expense.

So, as an example if you make the 2K monthly payment about 1700 is interest and the loan goes down 300.

 

But you are lowering John's liaility account by 2K. That means over time he will have paid off the liability and you will still have about half the purchase price as an open debt.

 

It seems you are talking about a Capital lease to own situation here, and to have that you need, need a tax accountant to help set up the loan papers and procedures.

 

I have no idea if this is legal or not, but you could hold back the 2K payment to a clearing account, then pay the loan payment from that clearing account.  But interest expense is still in the company name if the auditor comes knocking

 

Need to get in touch?

Contact us