We purchased a vehicle and paid part of it with our business credit card, which we then paid off out of our business checking account, and paid for the rest of the car with a loan from personal funds. How do I record this? Also, do I need to separate the amount for the actual vehicle and the amount that the dealer charged for tax, licensing, & fees? If so, how do I do that? Thanks in advance!
This was just what I needed, thank you!
I am a sole proprietor. I will need a depreciation account for the fixed asset, too, correct? Would you mind please helping me with this as well? Thanks in advance!
If you're a sole proprietorship, use Owner's Capital/Owner's Contribution for the equity account.
Yes, you will need to set up both a Depreciation Expense account and an Accumulated Depreciation fixed asset account if they aren't set up already. When you depreciate the vehicle, the journal entry is a debit to Depreciation Expense and a credit to Accumulated Depreciation. The Accumulated Depreciation account is considered a contra asset account since it will always carry a $0 or credit (negative) balance because it represents the accumulation of all of the depreciation (decrease in asset value) taken.
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