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How do i set up an account for a leased piece of equipment? It is a lease/purchase contract,

entered into a lease/option \ to buy contract on a piece of equipment in 2015, the contract will mature in 2018, at that time we can purchase via cash or a equipment loan, and purchase the piece of equipment, returen the piece of equipment, or continue to lease the piece of equipment. So how do i go about setting that up inQB. Starting the Company up in as a "New Company" the current"company is so messed up, want to enter everything manually, and correctly, help please

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Best answer 12-10-2018

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Leasing of equipment is a simple straight expense with no...

Leasing of equipment is a simple straight expense with no other current activity or posting required. Most irs forms segregate leased equipment from leased land so use an expense account called Leased Equipment or Equipment Leased. There as well would be no reason to separate lease payments for more than one lease into seoarate accounts.  Only at lease end might you have activity other than leasing, such as excess damage (Repairs) or mileage (vehicle expense) or purchase (asset creation of buyout)
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Established Community Backer ***

Leasing of equipment is a simple straight expense with no...

Leasing of equipment is a simple straight expense with no other current activity or posting required. Most irs forms segregate leased equipment from leased land so use an expense account called Leased Equipment or Equipment Leased. There as well would be no reason to separate lease payments for more than one lease into seoarate accounts.  Only at lease end might you have activity other than leasing, such as excess damage (Repairs) or mileage (vehicle expense) or purchase (asset creation of buyout)
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john.pero3276, after the lease is finished and we have pu...

john.pero3276, after the lease is finished and we have purchased the vehicle, how do I post that now to an asset account? It was initially an operating lease account with straight expenses taken.
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Now is when you create an asset for the vehiclemail in yo...

Now is when you create an asset for the vehiclemail in your chart of accounts. If you are borrowing any of the buyout you will also create a loan liability account. You can use the expense screen or check writing screen if you did write a check and will post the purchase price and any loan in the one transaction.

Example buyout of $1000 (including tax, title,etc) with $2000 cash due your expense from banking would be

Asset account $10000
Loan account  ($8000)
Net check.   $2000
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We actually wrote as check for $4000. I am wondering if I...

We actually wrote as check for $4000. I am wondering if I only post the $4,000 to the asset account or if I post the $32,500 which was the total of all payments including the $4000? If I post the $32,500, then what account does the other $28,500 post to?
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john.pero3276, We actually wrote a check for $4000 buy ou...

john.pero3276, We actually wrote a check for $4000 buy out on the leased vehicle. I am wondering if I only post the $4,000 to the asset account or if I post the $32,500 which was the total of all payments (payments were treated as straight expense at the time) including the $4000? If I post the $32,500, then what account does the other $28,500 post to?
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You only post $4000 to the asset. That is the total value...

You only post $4000 to the asset. That is the total value that you can depreciate. The 28,500 you already expensed as lease payments over time is/was never a business asset.
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It seems you had a Capital Lease, not an Operating lease....

It seems you had a Capital Lease, not an Operating lease. Your CPA can help you deal with the issues of "expensed already."

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