Computer Purchased with Monthly Payments on Personal Card

OptoWA · ‎November 10, 2023

I'm a cash-basis service business taxed on Schedule C, and I purchased a new computer for my business - under the $2500 de minimus to not have to capitalize the purchase. I bought the computer with my personal credit card connected to the place I purchased it. However, I'm paying monthly payments for 12 months at 0% interest.

How should this computer / monthly payments best be accounted for? I'm assuming it can't be expensed at once since it's paid with monthly payments?

Service · ‎November 15, 2023

You have two issues. 1. How do you set up an expense that has monthly payments. 2. How do you make monthly payments using a card that is not part of your business? I kinda think you should speak to your accountant about this.

Rainflurry · ‎November 15, 2023

@OptoWA

It can be fully expensed. The fact that you have monthly payments is irrelevant. To record the purchase, make a journal entry: debit Computer Expense (or whatever expense account is appropriate) and credit Owner's Equity (or Owner's Contribution). If you make the payments personally, there is nothing further you need to record.

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Computer Purchased with Monthly Payments on Personal Card

Computer Purchased with Monthly Payments on Personal Card

Computer Purchased with Monthly Payments on Personal Card

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