[Bulk] Hire agreements

[Katie Eldridge]

Hi Alex,
I'm a newcomer and not an accountant, but how I'd do this would depend 
how I was paying for it..

If I was paying by standing order or direct debit, I would show the 
payments as you suggest:  to do this I would make a bill for the full 
amount, probably with a due date of the final payment (although I seem 
to remember discussion on this list in relation to long term contracts 
and payment due dates if you want more complex); then set up a scheduled 
transaction to record the actual payments against this bill.

If I was being sent a monthly bill, I would just enter it as a separate 
monthly bill (we do this for our phone contract even though it's 
technically a two year agreement, rather than having the recurring 
amount and then separately recording any calls which were not included 
in the call plan).

Hope that helps,

Katie

On 04/01/16 22:26, Alex 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
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