Help with a same as cash purchase

[Mike or Penny Novack]

Donna Pfeifer wrote:

>I have a small, one person business and am doing my own bookkeeping. I've never done any DE work but I think I have the gist of it.
>
>I purchased a new high end computer for my business on a 18 months same as cash basis. I made no down payment as it was all placed on a new credit card opened for that specific purpose. I am making payments of $200 a month.
>
>What is the proper way to enter this?
>  
>
You create a liability (debit fixed asset computer, credit liability) 
upon purchase. As you make payments you debit the liability and credit 
checking). The fact that this is a no interest loan not relevant except 
that you don't have to split payments between interest and principle.

>It also needs to be depreciated. I am working on figuring that out. It looks like, for the U.S.A., it would be a 5 year depreciation using MACRS/GDS.
>  
>
That's usually done at year end. BUT .........
    You describe yourself as new to double entry bookkeeping. I strongly 
suggest you get texts along the lines of "bookkeeping/accounting for the 
small sole proprietorship". This will help you learn WHAT to do. We can 
best help you with (when you know the what) HOW to do it using gnucash. 
Using "depreciation" as an example, you will learn what your options are 
and CHOOSE a method. Businesses are usually (not always, depends on the 
business) allowed some choice BUT have to choose a method and be consistent.


Michael D Novack