Entering Equipment Purchase with 100% financing
Hello, I recently purchased a piece of equipment that is 100% financed for a 48 month term. My concern is how to allocate/separate the different portions of the loan (fees, taxes, interest, insurance, etc.) Also, the insurance for the equipment is rolled into the equipment loan. I know that I would have to create a fixed asset account for the equipment but I'm not sure if I include the taxes and fees paid in the value. I also would like to know how the interest portion of the insurance premium gets categorized. Is it part of the Insurance expense or should I separate the interest from the premium and allocate it under Interest expense? The dollar amounts of the loan are as follows:
Price of Equipment: $22,714.00
Down Payment: $0.00
Taxes: $1,412.84
Fees: $485.85
Amount financed: $24,612.69 (Price, taxes, & fees)
Interest paid on equipment loan after 48 months: $2,540.91
Total principal & interest paid after 48 months: $27,153.60
Insurance premium for the 48 month term (excluding the interest portion of the insurance): $1,192.00
Interest paid on the insurance premium after 48 months: $123.20
Total Insurance premium and interest after 48 months: $1,315.20