I’ve got you covered, Alicia.
In QuickBooks Desktop, you’ll want to set up an asset account to track depreciation. I’m glad to show you the steps:
- Create a fixed asset account for each asset (or group of assets) you want to depreciate. Leave the opening balance at zero.
- Add two subaccounts to each asset account you created. One subaccount tracks the cost of the asset and the other tracks accumulated depreciation.
- Name the first subaccount something like “Cost” and the second subaccount something like “Accumulated Depreciation.”
- For the Cost subaccount, enter the original amount of the asset in the Opening Balance field. Then, enter the date you purchased it in the as of field.
- For the Accumulated Depreciation subaccount, enter 0.00 as the opening balance if you acquired the asset after your QuickBooks start date. If it's before the start date, enter the accumulated depreciation of the asset as of the start date. And enter this amount as a negative number.
- Create an expense account like “Depreciation Expense” to track depreciation expenses.
Then, create a journal entry to record the lost value or follow this process:
- Go to your Lists menu, then select Chart of Accounts.
- Select the subaccount that tracks accumulated depreciation for the asset you're depreciating.
- In the Activities dropdown, choose Use Register.
- Enter the transaction at the bottom of the register:
- Enter the depreciation amount as a decrease.
- In the Account field, select the expense account you set up to track depreciation.
- Press Record.
Concerning amortization, you can use the check and journal entry features. Make sure the amount on your check must equal the total of the lines listing principal and interest.
You can consult your accountant or bookkeeper for specific information on what accounts should be used and to be sure you account for the amortization and depreciation correctly.
If this transaction occurs on a regular basis, you can memorize it or schedule this transaction to be automatically entered. This way, the amortization happens without manual data entry on your part.
Don’t hesitate to tap the Reply button below if you have other questions or concerns besides the depreciation and amortization schedule. I’ll be here to help. Take care always!
