Help with a same as cash purchase

[Donna Pfeifer]

Thanks for the info, I've got it now.

This program is really neat!

Donna Pfeifer



________________________________
 From: Mike or Penny Novack <stepbystepfarm at mtdata.com>
To: Donna Pfeifer <donna32132 at yahoo.com> 
Cc: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org> 
Sent: Tuesday, August 27, 2013 12:35 PM
Subject: Re: Help with a same as cash purchase
 

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