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How do I enter a vehicle purchase with a down payment and loan payments thereafter????

can anyone tell me the steps for adding a vehicle purchase into quickbooks and then how to enter the loan payments thereafter... should be somewhat simple but it's been a while since I took accounting in college and I don't remember the journal entry part of it...

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Best answer 02-28-2018

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Super Explorer ***

Re: How do I enter a vehicle purchase with a down payment and loan payments thereafter????

I think you would enter the vehicle purchase as an asset, for the total amount of the purchase. Then you would set up a liability account for the amount of the loan, and the first entry would be the down payment, and all other entries would be reducing the loan balance. You'd want to track interest and principal seperately, so your declining balance is correct according to the lending instituion, and depending if you're writing off the interest on your tax return as a business expense.

1 Comment
Super Explorer ***

Re: How do I enter a vehicle purchase with a down payment and loan payments thereafter????

I think you would enter the vehicle purchase as an asset, for the total amount of the purchase. Then you would set up a liability account for the amount of the loan, and the first entry would be the down payment, and all other entries would be reducing the loan balance. You'd want to track interest and principal seperately, so your declining balance is correct according to the lending instituion, and depending if you're writing off the interest on your tax return as a business expense.

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