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gjsinop
Level 2

Capital lease

How do you set up a capital lease in QBO where I would own the piece of equipment at the end of the lease?

2 Comments 2
Rustler
Level 15

Capital lease

There is no such thing as a capital lease anymore, in 2019 it was replaced with a financing lease.

Create the fixed asset account for the item, create a sub fixed asset account for item accumulated depreciation.

 

If you made a down payment, enter that and use the item fixed asset account as the expense

 

Create a long term liability account. Then a journal entry, debit the fixed asset item account and credit the long term liability account for the amount of the loan.

 

Payments made as split into two portions, interest expense and loan payments

gjsinop
Level 2

Capital lease

Perfect. Thanks!

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