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Level 1

How to post vehicle purchase with rebate

How do I record the purchase of a truck? 
purchase price is 25560

the dealer gave us a rebate of $2000
We put another $2000 on a credit card.
the rest was on a loan. how do I record taxes and registration fee   

I already created the asset account and the loan account I just don’t know how to do the journal entry with the rebate 

5 Comments
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Community Champion

How to post vehicle purchase with rebate

There are two scenarios here and you must research your own state rules on this. Some states treat rebates as simply a sales discount and do not charge sales tax on the rebate. Some states treat the rebate as if it were cash out of your pocket as an additional down payment and tax the full purchase price of vehicle. Figure that out before you proceed.

 

In any even the sales tax and title fees (but not annual license plate) and other doc fees are added to the asset basis and are not direct expensed until and unless there is a program to do so for 2020 taxes.

 

Scenario 1 record cc charge of $2000, add line item $23560 plus taxes and fees plus expense amount, minus line item bank loan and the result should still be a cc charge of $2000.

 

Scenarion 2 record cc charge of $2000, add line item $25560 plus taxes and fees plus expense amount, minus line item bank loan minus $2000 from your own equity contribution and the result should still be a cc charge of $2000

Highlighted
Level 1

How to post vehicle purchase with rebate

I am in CA. The rebate was taxed. 

Highlighted
Level 1

How to post vehicle purchase with rebate

I am in CA. The rebate was taxed. 

Highlighted
Community Champion

How to post vehicle purchase with rebate

Then use scenario 2. Treat the rebate as you would cash back on a credit card - all as if it were "free" cash for you to use. This makes it a personal contribution of equity into the business.

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Level 1

How to post vehicle purchase with rebate

I don’t separate the sales tax, doc fees, and registration into separate expense items?

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