The purchased equipment is a Fixed Asset. You only recover the Expense by taking depreciation over the IRS recognized life of the equipment. It does not matter how you paid for it, cash, loan, combination. The price is the asset but is not the expense. When you make payments it reduces the loan and the loan only. Your downpayment plus the loan equals the fixed asset value. None of the payments are an expense, not even the down payment as it went against the fixed asset. If there were an interest portion that would be added as an extra expense but you said it is interest-free.
It is not a long-term liability since the loan term is less than one year.
When you create one of the 6 monthly payments you post it to the loan. Period.
Expense is only taken as depreciation and as a general example if it is a 5 year item you take 1/10 in year one, 1/5 in years 2-5 and the final 1/10 in year 6
