Purchase of New Asset

thumpersmom

I am purchasing a new asset and plan to pay cash for it, no loan. I have set up a new asset account. How do I record the payment for the new machine? What category should I select for the payment to make it show up in the asset account?

UKR

Are you tracking cash moving into and out of your business using a Type = Cash (or can be a pseudo - Checking account), e.g., "Cash Register", "$-Cash", etc.

In that case, the transaction recording the purchase of the new machine should be categorized as a transfer from the cash account, e.g., [$-Cash]

thumpersmom

I use a checking account to pay for everything (including payments for my credit card). I plan to buy the machine on the credit card. I can record the payment on the credit card as "cash" and pay the card from my checking account but if I make a transfer from the checking account to the asset account my checking account balance will not equal the bank any more.

UKR

thumpersmom said:

I use a checking account to pay for everything (including payments for my credit card). I plan to buy the machine on the credit card. I can record the payment on the credit card as "cash" and pay the card from my checking account but if I make a transfer from the checking account to the asset account my checking account balance will not equal the bank any more.

In that case, record the purchase in the credit card account like any other purchase, except categorize it as a transfer to the new asset account. This will make a transaction appear in the Asset account register.
When due, pay the credit card balance as you usually do, as a transfer from the Checking account.

thumpersmom

Thank you!! That worked perfectly.