Setting up equipment assets for new business

[Cam Ellison]

John Jason Jordan wrote:
> I have a new business into which I am investing $2,000 cash and $33,000
> (formal written appraised value) of equipment. 
>
> 1) Setting up the cash was no problem, but I can't figure out how to
> set up the equipment. Note that the equipment consists of eleven items,
> five of which must be depreciated on one schedule, four on another
> schedule, and two on a third schedule. Therefore, I need to enter the
> items individually somehow. After setting it up the balance sheet
> should show a $35,000 net worth of the business.
>
> I created an asset account called "Equipment." If I enter an item in
> the Increase column (which I assume is the debit column, since it is on
> the left), when I hit enter to add the entry GnuCash automatically adds
> a credit for the same amount in the Equipment account, leaving
> Equipment with a zero balance. I can't figure out where the offset to
> the debit for a new equipment item should go.
>   
What you need to do is set up an account for each piece of equipment, 
then set up two sub-accounts under each.  In one you put the original 
appraised value.  In the other, which is a "contra" account you put, 
annually, the amount of the depreciation.  You'll have to calculate 
that, but it can be done when creating the transaction.  So you'd have a 
tree like this:

Equipment----
                     |
                     Item 1
                             |-------Original Value
                             |-------Depreciation
                     Item 2
                             |-------Original Value
     etc.

The account for each item will always show the current depreciated value.
> 2) Assuming I can figure out the above, how do I set the depreciation
> schedule for each item? Or do I wait to do that until year-end when I
> will want to post the depreciation?
>   
Do this annually.  You can calculate it directly in the transaction.  
The other account in the transaction should be Expenses:Amortization or 
some such.

HTH

Cam