Entering Transaction for Fixed Asset purchase

jkenfield · ‎February 08, 2020

Hello! I need verify that I correctly entered the purchase of my printer (Fixed Asset with Depreciation). I am new to QB and accounting! I know that I made the correct Fixed Asset accounts with the Original Cost and Depreciation accounts. My question come in how to categorize the transaction of the purchase. I feel like I may have recorded it wrong.

I categorized the purchase as an expense (Other Business Expense) and it was paid by a combination of owner payments put in as individual equity account entries.

I attached screenshots of the Fixed Asset Account and the Expense Transaction. I am not sure where the Opening Balance Equity account came from - I did not create that, QB did when I set up Fixed Asset account.

Can someone either verify that this is correct or tell me where I went wrong :)

MJoy_D · ‎February 08, 2020

It's our pleasure to help, @jkenfield.

Yes, that's correct. The cost of the printer will post to your Fixed asset printer and the expense transaction that you've created will be the balance of your asset.

You can follow the steps in the article that was provided by JaneD on how to manually track depreciation using journal entries.

Let us know if you still have questions in adding your transactions. We're always here to answer them for you. Have a wonderful day!

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JaneD · ‎February 08, 2020

Good day, jkenfield.

QuickBooks Online (QBO) automatically tracks the current value and depreciation of your asset when creating the account. You might want to delete the journal entry created by the system since you'll be entering the purchase transaction of the asset.

On another note, you can create an expense and use the Fixed Asset account. You'll have to change the line 1 to Fixed Asset since an equity account was used to pay for the computer.

I'd recommend working with an accountant for better guidance in tracking your depreciation in QBO.

You'll want to check this article about recording the depreciation: Depreciate assets in QuickBooks Online.

Reach out to us if you have further questions. We'll be around to help.

jkenfield · ‎February 08, 2020

Thanks for your response! So is this correct:

I remove the journal entry that posted the original amount from the Fixed Asset Printer Original Cost account and then change the category "Other Business Expense" to Fixed Asset Printer Original Cost account?

MJoy_D · ‎February 08, 2020

It's our pleasure to help, @jkenfield.

Yes, that's correct. The cost of the printer will post to your Fixed asset printer and the expense transaction that you've created will be the balance of your asset.

You can follow the steps in the article that was provided by JaneD on how to manually track depreciation using journal entries.

Let us know if you still have questions in adding your transactions. We're always here to answer them for you. Have a wonderful day!

rh33663366 · ‎August 25, 2020

Shouldn't the Printer be a "Fixed Asset and not an Expense"

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Entering Transaction for Fixed Asset purchase