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Rutherford1984
Nov 21, 2021 10:09 PM UTC
Question

Payments

Hello all , so I use 2016 desktop version , problem I am having is I bought a new dump truck and have it under long term liability, however when i create a bill and make a payment it is adding to the original cost instead of decreasing the cost of the truck , not sure what is going on , any help would be so greatfull , thank you all in advance…Steve 

1 reply

Rustler
Rustler
Nov 22, 2021 11:54 AM UTC

The dump truck should be listed as a fixed asset, the cost to include a down payment if made makes up the asset value. Normally there is also a sub account for accumulated depreciation.

 

When you pay the liability account for the truck, you use that liability account as the expense (reason) for the payment. That will lower the total amount due in the liability account. Truck payments are normally composed of both interest and principal. The interest paid is an expense.

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