Purchase of a new/used Business vehicle; with 2 types of down payments & financing of everything else

victoriah1956 · ‎October 26, 2023

I use QBDT Premier Plus Contractors' Edition 2022

At the risk of repeating a question, I'm trying to get a clear solution to these questions:

The purchase of a used business truck included:

1) a $10,000 "loan" from me to my husband for the majority of the downpayment for the vehicle

2) Hubby put $2,000 down, (for a total of $12,000 down).

3) I want to set up the $10,000 as a liability account as hubby is repaying it monthly, from the business account . How would I record this in QBDT ?

4) In addition, the Bill of Sale has the Extended Warranty amount and the GAP insurance, sales tax, fees, etc. which was all financed with the vehicle loan.. Should these other items be categorized in the check (expenses) as well, when I record the purchase of the vehicle?

I have set up Fixed Asset VEHICLES, with a sub account for the vehicle (2015 Chevy Silverado) (with a sub acct for Accumulated Dep), as well as the Long Term Liability Acct for the purchase loan (principle paid each month) and an Interest Exp account for the interest paid each month..

BigRedConsulting · ‎November 26, 2023

If you don't have them, create three accounts to track the purchase, named something like:

"Business Vehicle" - Fixed Asset account type

"Business Vehicle Loan" - Other Current Liability account type.

"Loan from my sweet wife" - Other Current Liability account type.

Make an entry in the Loan account register for the amount of the loan, using the Business Vehicle account as the other account.

Make two entries in the Business Vehicle account, increasing the account balance, one for each down payment: His should use an Equity account, like Owners Equity, since he's adding money to the business, an increase to equity. Yours should use the Loan from my sweet wife account.

View solution in original post

BigRedConsulting · ‎November 26, 2023

If you don't have them, create three accounts to track the purchase, named something like:

"Business Vehicle" - Fixed Asset account type

"Business Vehicle Loan" - Other Current Liability account type.

"Loan from my sweet wife" - Other Current Liability account type.

Make an entry in the Loan account register for the amount of the loan, using the Business Vehicle account as the other account.

Make two entries in the Business Vehicle account, increasing the account balance, one for each down payment: His should use an Equity account, like Owners Equity, since he's adding money to the business, an increase to equity. Yours should use the Loan from my sweet wife account.

victoriah1956 · ‎November 27, 2023

BigRed Consulting: Thanks very much for the clear explanation to my question. I am getting this entered today.

Best,

VictoriaH

(aka "sweet wife") LOL

victoriah1956 · ‎January 27, 2024

BigRedConsulting:

I've made my entries into the suggested accounts, but I am very unsure about them.

Let me give you some additional info:

1) Vehicle purchased via mixture of financing & down payments

I) opened the Vehicle Long Term Liability account with the Financed balance.

2) I recorded Hubby's $2,000.00 downpayment to Business Vehicle FAA (from Owner's Contribution, which increased both account balances);

3) I added the Short Term Liab Account " Loan from wife for downpayment"

I opened that account with a $10,000 balance and also recorded this in the Vehicle Fixed Asst Acct. (thus increasing the balance)

I've attached several screen shots: COA; Vehicle FAA; Vehicle Long Term Liab Acct; Ally Savings (Bank) Acct; and 2 Vendor Accts - Ally Savings & Ally Financial.

I think I'm overthinking this whole thing and probably have messed up my accounts. My confusion comes from how the payments are processed. We have 1/2 of each payment withdrawn from the Biz checking account 2x a month. It is transferred to the Ally Savings (Bank) Acct. Then once a month the full payment is transferred from this account to the Ally Auto Loan (which I have labelled Ally Financial - a Vendor.

Perhaps I don't even need these 2 Vendor accounts. But, then how would I show how the payments are processed in QBs?

Another issue is this - if you pull the Vehicle Long Term Liability acct, you see the list of BILLs.... which HAVE been paid, but for some reason don't show in this account. And they don't show when I click "Pay Bills" either.

My guess is that I need to simplify this process by eliminating the 2 Vendor accounts (Ally Financial & Ally Savings Acct). Since all of the payment activity IS recorded in the Ally Savings (Bank) Acct, I probably don't need the vendor accounts. BUT, if I eliminate those, how do I record the Bill From, when I enter the Bills to be paid?

I'm putting this aside for now. Hopefully I will get some expert insight on this and then can fix what needs fixing and move on to getting the year end process completed.

thanks very much to anyone who has a clear resolution to my confusion.

victoriah1956 · ‎February 02, 2024

Hey, never mind my previous question.... I have figured it out.

I just need to clear my mind before tackling these things.

Lesson learned.

Topics

Training

Community

Resources

Purchase of a new/used Business vehicle; with 2 types of down payments & financing of everything else