musical instrument rental question

@andrew-onesound- 

OK, got it.  Set up a fixed asset account called 'Equipment' or 'Instruments' or something similar.  Then, assign that account to the check/expense/bill you used to record each purchase of the instruments for the business. 

As far as the personal instruments, you can add those to the fixed asset account using a journal entry.  To do that, you will need to know the fair market value (FMV) of the instruments when they were contributed to the business.  Use whatever source you feel is accurate in estimating the FMV.  Then, create the journal entry (New > Journal entry): date the journal entry as of the date the instruments were contribute to the business.  On line 1, enter the newly-created fixed asset account and under the debit column, enter the FMV of the instruments.  On line 2, enter the appropriate equity account (Owner's Capital or Owner's Contributions if a sole proprietorship/single-member LLC, Shareholder Contribution if S-Corp) and under the credit column enter the FMV.  The journal entry adds the FMV to your fixed asset account and increases your equity in the business because you contributed personal property.

As far as recording depreciation, you should really leave that up to your CPA/tax accountant.  You have options. 

Thank you so much!

My business has also purchased some music books and small accessories that I intend to sell. I am assuming these are considered inventory. Is there a way around needing to up grade QB plans?

@andrew-onesound- 

You're correct, they are considered inventory.  Yes, you an do this without upgrading - record all of your inventory purchases to an Inventory Asset account.  It's not necessary to use QB to track individual items, especially when the quantity is limited.  The easiest way to do this is to record the purchase of inventory using a bill, check, or expense (as appropriate) and use Inventory Asset as the category.  The only drawback to this method is that you will need to make a manual adjustment for the cost of the items you sell (COGS).  To do that, each month (or however frequently you want your P&L and balance sheet to be accurate but at least annually) take a physical count of your inventory and add up the total cost you paid for the items in-stock.  It's a good idea to have a price tag on each item that has the item's cost on it.  I have worked with many retailers back before everyone had POS systems and it was common to hand-write a price sticker that had the wholesale cost written in code (wholesale cost written backwards works well) so that you could quickly add up the cost of your on-hand items.  Then, make a journal entry that reduces inventory (it will be overstated because you have recorded all inventory purchases to that account) and increases COGS.  For example, let's say you're showing $1,000 in inventory on your balance sheet/register.  After taking a physical inventory, you actually have $600 on-hand.  Therefore, you need to create a journal entry that reduces inventory by $400 and increases COGS by $400.  The journal entry is a debit to COGS for $400 and a credit to Inventory for $400.