How to record purchase of fixed asset in Quickbooks?

support19 · ‎September 26, 2019

Asset is an Accounting Software (Quickbooks)

Payment made from a personal bank account

I want it to be depreciable and I want to learn how to set depreciation rates for different assets

Rustler · ‎September 26, 2019

use a cash type bank account and make a deposit, use owner equity investment as the source of the deposit

create the Fixed asset type account in the chart of accounts and name it, create a sub fixed asset account named accumulated depreciation-asset name

Use the cash type bank account and enter the purchase, use the fixed asset account as the expense (reason) for the purchase

depreciation is a manual calculation and how much it is will depend on your coutries regulations in this area, when have the amount do a journal entry

debit depreciation expense
credit accumulated depreciation-asset name

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Rustler · ‎September 26, 2019

use a cash type bank account and make a deposit, use owner equity investment as the source of the deposit

create the Fixed asset type account in the chart of accounts and name it, create a sub fixed asset account named accumulated depreciation-asset name

Use the cash type bank account and enter the purchase, use the fixed asset account as the expense (reason) for the purchase

depreciation is a manual calculation and how much it is will depend on your coutries regulations in this area, when have the amount do a journal entry

debit depreciation expense
credit accumulated depreciation-asset name

NORDHYVE · ‎May 12, 2020

Thanks for the great answer Rustler,

Can you please kindly help me understand this approach better?

So, I have an owner's equity account and an asset account. When I purchase an asset and using QBO terminology, the "Payee" would be the asset account, and "Payment Account" would be the owner's equity account. (If I have understood this correctly).

Assuming the previous statement is correct, how to you track the actual payee? For example, I buy a car and pay $20,000 to Toyota, but to track the assets, I use the assets account as payee and not the Toyota. How do you bring the vendor into the picture so that in future I can run a report on how much I have paid to Toyota?

Many thanks,

Rustler · ‎May 13, 2020

@NORDHYVE wrote:

Thanks for the great answer Rustler,

Can you please kindly help me understand this approach better?

So, I have an owner's equity account and an asset account. When I purchase an asset and using QBO terminology, the "Payee" would be the asset account, and "Payment Account" would be the owner's equity account. (If I have understood this correctly).

Assuming the previous statement is correct, how to you track the actual payee? For example, I buy a car and pay $20,000 to Toyota, but to track the assets, I use the assets account as payee and not the Toyota. How do you bring the vendor into the picture so that in future I can run a report on how much I have paid to Toyota?

Many thanks,

If you re-read my answer, I never mention equity accounts. Equity is (95%) of the time an automatic math function and you do not mess with it.

You enter a payment to the Toyota place (vendor), in the expense account section you list the fixed asset account you first created for the car, enter the amount paid.

dbiancosino · ‎May 26, 2020

I have a similar question. You say to use the sub fixed asset account as the expense account. Is this how I can get it to show as an expense, If say I expense the whole asset in year one. I have a woodshop and list large items as Assets, maybe I shouldn't . Note I use desktop, not online version

Thanks much

Rustler · ‎May 26, 2020

@dbiancosino wrote:

I have a similar question. You say to use the sub fixed asset account as the expense account. Is this how I can get it to show as an expense, If say I expense the whole asset in year one. I have a woodshop and list large items as Assets, maybe I shouldn't . Note I use desktop, not online version

Thanks much

If the purchase was for less than $2500 you can expense it when you buy it.

expense just means the reason for the payment when you use it under that concept.

I prefer to book the assets as fixed assets, then when tax comes you decide whether or not to use one of the two accelerated depreciation schedules to expense the item in full. But whether you hold it as a fixed asset and depreciate over the years, or expense it the first year, it still has scrap value when it is disposed of, so for that reason it stays on the books