Recording Fixed assets when using a loan to purchase and planning a section 179 deduction

In a few steps, @Docyak. I'll show you how to manage your loans and purchases in QuickBooks Online.

While operating and expanding your business, there may arise a need to secure a loan to acquire new assets. These assets, such as vehicles, equipment, machinery, buildings, and others, tend to depreciate over time.

Within QuickBooks Online, to record loans, assets purchased using those loans, loan repayments, and asset depreciation.

Here's a simple guide:

1. Go to Settings ⚙ and select Chart of Accounts.
2. Select New. Depending on your account view, you’ll either see a panel labeled New account or New category. Select the option you see below for the next steps.

Nonetheless, if you choose to immediately utilize the funds for a purchase instead of depositing them into a bank account, we recommend contacting your accountant for further guidance.

Remember, it is also essential to regularly update and review your liability accounts to ensure they accurately reflect what you owe and the interest amount of your loan.

It is good to learn more about the basic accounting terms and processes. Are you interested? See this page: Learn common accounting terms.

Ping me again if you need additional information regarding loans. I'll be here to guide you. 

I appreciate your help but it really did not answer the question about section 179 for assets and how to record that when paying for it with a loan

@Docyak 

Did you pay for the equipment out of your business bank account or did the lender pay for the equipment directly?  If the cash was deposited into your bank account and then you paid for the equipment, I will assume you already recorded the loan payable.  If that's the case, assign your equipment fixed asset account to the payment/expense/check.  That will decrease your bank account and increase the fixed asset value.  If the lender paid for the equipment directly, you will need to use a journal entry: debit equipment fixed asset, credit loan payable.

As far as recording the Section 179 deduction, make a journal entry: debit Section 179 Expense (create the expense account if you don't have one), credit Accumulated Depreciation (fixed asset account - set one up if you don't have one). 

On a side note: If the equipment was $2,500 or less (or each item was $2,500 or less on a line item basis on your bill), you can expense the equipment fully (look up IRS De Minimis Safe Harbor), so it is not necessary to use the Section 179 deduction.  Section 179 can have some unintended consequences (it reduces your basis in the S-corp) which I recently discovered when selling a couple of S-corps so it's best to discuss it with your CPA.      

The lender pay directlys. I have attached a screenshot of what I normally do when I buy office supplies. Should I do this and then record it again as an asset followed by a recording as this 179 expense?