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I am needing assistance with how to set up a company truck that was purchased by the Owner's father in which we will be making the payments. We were instructed to treat it like a leased vehicle. So I am needing to know how to set it up in QBO.
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Snice it sounds like the company will be keeping the vehicle, it is a capital lease, rather than an operating lease.
Set up the fixed asset account and accumulated depreciation in the chart of accounts, I do it this wayfixed assets>> vehicle>> >> cost>> >> accum. depreciation vehicle
then create a liability account called capital lease vehicle (replace the word vehicle in the account names with the name of the vehicle, ie 2020 Ford F150 or something)
Journal entry, debit the fixed asset cost account and credit the lease liability account for the amount of the loan.
When you make payments, only the interest portion of the payment posts to interest expense, the remaining amount posts to the lease liability account lowering it balance
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Thank you so much for your help!