How do I record the purchase of a service agreement?

Good day, @tgrace_99-yahoo-!

It's easy to record a fixed asset purchase in QuickBooks Online (QBO), and I'm here to help you with that.

First off, you must check if you already have an asset account to prevent duplicates. Here's how:

1. Go to the Gear icon and click Chart of accounts.
2. To sort your Chart of Accounts by account type, click the Type ▼.
3. Under the Type column, search for accounts with "Other Current Assets" or "Fixed Assets."

If the description under the Detail Type column for these accounts closely defines the asset, then there's no need to create another asset account.

However, if you don't have one yet, here are the steps to set up an asset account:

1. Go to the Gear icon and select Chart of accounts.
2. Click New. 
3. Select the account type.
4. In the Save account under dropdown, select Fixed Assets or Other Assets.
5. In the Tax form section dropdown, choose the option that most accurately represents the asset.
6. Enter a name in the Account name field.
7. In the Starting date and opening balance dropdown, choose a starting date and current value of your asset account balance field. If recording the loan, leave it empty.
8. Once finished, click Save.

Here's how to record the fixed asset purchase using a journal entry:

1. Click the +New button.
2. Select Journal entry.
3. In the Journal date, enter the Asset's purchase date.
4. On the first line, choose the Asset account, record the item, and enter the purchased value as a Debit.
5. On the second line, enter the same amount.
   • Credit the Bank Account if the purchase of the asset needs to be documented in your Bank Registers for historical reconciliations or any other reason.
   • On the other hand, Credit the Opening Balance Equity account if the asset's purchase won't be recorded in your books.
6. Select Save and close.

Feel free to read this article if you need help with how to depreciate assets: Depreciate assets in QuickBooks Online. You may also consult your accountant to regularly review how to track depreciation. 

Keep me posted if you have further concerns with Fixed Assets. I'm just a reply away. Take care! 

@tgrace_99-yahoo- 

If you decide to record the printer as a fixed asset, you should include the cost of the extended warranty.  However, the IRS does not require you to record purchases < $2,500 as a fixed asset.  It's known as the IRS De Minimis Capitalization Threshold.  Or, you can record it as a fixed asset and then immediately depreciate it 100% with a Section 179 deduction.