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dpic44
Level 3

Income from Leased Machinery/Equipment

Income from Leased Machinery/Equipment

 

How do you set up income from leased machinery/equipment?  I assume you need a fixed asset account for Leased or Rented Equipment, an income account, and an item for the invoice.  I also assume the equipment would be depreciated.  There will be a buyout at the end for the customer.

 

Just want to check if this is correct and what entries to make.

 

Thank you!

Solved
Best answer April 30, 2019

Best Answers
dpic44
Level 3

Income from Leased Machinery/Equipment

Thanks Rustler!  QuickBooks actually called me and answered my question.  I was right that it has to be recorded as a fixed asset when purchased and depreciated annually, and a monthly invoice goes to the lessee and applied to lease income.

View solution in original post

4 Comments
Rustler
Level 15

Income from Leased Machinery/Equipment

Starting this year the rules for accounting for a capital lease have changed, I suggest you get with a tax accountant to insure the 2019 rules are followed

dpic44
Level 3

Income from Leased Machinery/Equipment

Thanks Rustler!  QuickBooks actually called me and answered my question.  I was right that it has to be recorded as a fixed asset when purchased and depreciated annually, and a monthly invoice goes to the lessee and applied to lease income.

View solution in original post

jennsears5
Level 1

Income from Leased Machinery/Equipment

Does this mean you need to enter the actual equipment being leased as a fixed asset and the Equipment Lease as the Income Account?  And does any of this change if the Lessee will not own the equipment at the end of the lease?

MarsStephanieL
QuickBooks Team

Income from Leased Machinery/Equipment

Hi there, @jennsears5.

 

Allow me to share some details on how to record the customer's transaction about leasing your equipment.

 

You can create a service fee item for the equipment that is leased by your customer. Regarding your other concern about creating a liability account, it is not applicable in the scenario that you've mentioned. 

 

Also, note that the Fixed Asset is entered from the purchase date of your equipment, while the Lease Income is used when your customer is renting equipment.

 

Now, you can proceed to create a service item for the lease transaction of your customer. I'd be happy to show you how to do that:

 

  1. Go to the Lists menu and select Item List.
  2. Click The Item drop-down button and choose New.
  3. Select Service in the for the Type of item. Then enter the details of the fields needed. This is how the process looks like:

 

However, if you are referring to create a Capital Lease, I'd recommend contacting your accountant to help you get to the bottom of it. 

 

I've added an article you can review about products and services in QuickBooks Desktop: Add, edit, and delete items.

 

I'll be around if you have other questions. Click the Reply button below to let me know. Take care.

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