Hire agreements
Michael Hendry
hendry.michael at gmail.com
Tue Jan 5 04:38:49 EST 2016
> On 4 Jan 2016, at 22:26, Alex <mcmurchy1917-gnucash at yahoo.co.uk> wrote:
>
> My company has got a hire agreement for a print machine. At the end of the hire agreement the machine has to be returned to the supplier so is of no value to us.
>
> There are 20 equal quarterly payments to be made of £1,301.11, which to me suggests at the start of the agreement we have a liability of £26,022.20.
>
> I think I would like to show the quarterly payment -
>
> 1. reducing the liability;
> 2. reducing the checking account;
> 3. increasing the expense account;
>
> Is this the correct way to account for these agreements?
> If so how would I go about it.
>
> Alex
Morning, Alex.
In what way is your hire of the print machine different from (say) the hire of a company car?
You should simply record the quarterly payment as a transaction between your current account and an expense account.
(I am not an accountant!).
Michael
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