Used Equipment Private Sale

Hi there @RGConstruction,

Congrats on the purchase! It sounds like you've been putting a lot of thought into how best to record this transaction in your books. The advice you're looking for is primarily accounting advice, but I'd be happy to go over some of the ways you can record these using QuickBooks Online.

If you're looking to add these transactions using the bank feed, there isn't a way that you can connect them. You won't be able to match one transaction that's been entered into QBO to two separate transactions in two separate accounts. My suggestion would be to record a cheque in the amount of the trailer from your chequing account. If you enter the cheque into QBO first, you'll be able to match it to what's in your bank feed. If you're not using the bank feeds you can skip that step. 

Next up I'd suggest recording that tax payment separately as an expense. You can select the appropriate tax account as the category for the line item. In terms of deciding which account you should use specifically, I'd suggest reaching out to your accountant. They'll know the best way to record this for your business. They may even have another suggestion for how this could be recorded in a singular transaction, so it's worth picking their brain. You can easily invite your accountant to QuickBooks by using the invite field in the My Accountant tab.

If you're not working with an accountant but would like to in order to get support on transactions like these, I'd suggest using the Find a pro to help button on the My Accountant page. You'll be brought to our database of QuickBooks-certified accountants who are willing and ready to give you a hand with your bookkeeping tasks. 

Let me know if you have any other questions. I'm here to help out with all your technical QuickBooks-related questions. Have a great weekend!

Hello @RGConstruction ,

I'm assuming that the cheque you speak of was written from your business chequing account, and that the credit card payment for tax was paid with a business credit card.  If that is the case, then your bookkeeping entries should be as follows (and I don't recommend you trying to fill in your opening balances with QBO's set-up because last I looked at it, it was still wrong . . . creates an entry on the wrong side of the account):

1.  Create a Long Term Asset Account for the trailer and leave it in the account set-up as a $0.00 balance; create two sub-accounts under the main heading, one called "Name of Asset Account - Original Cost" and one called "Name of Asset Account - Accum. Depreciation (or Amortization)".

2.  Create a JE that looks as follows:

This combines all your purchase transactions into one entry.  Note that your chequing account is reduced by the amount you paid to the private seller and the credit card account is increased by the amount of the taxes paid to your motor vehicle registration office.

4.  Each year, you will make a JE to account for depreciation (this is assuming a 30% depreciation on a declining balance):

Now when you look at your asset account for the Trailer, The top level account will have the current balance of the value of the asset:

I am not in a participating province so am not sure of the implications of HST as opposed to GST & PST on depreciation, but for personal vehicles, you are allowed to claim the GST & PST on the price of the vehicle as part of the original cost.  If you are getting an ITC for the entire amount of the HST you paid on the vehicle, then likely the depreciation would only be based on the purchase price, in this case, $10,000.00.  My calculation included the entire amount of the HST thus the calculation of $3,390 for depreciation.  You will have to do whatever needs to be done for your province.

I should also mention that you can put the name of your Vendor in the line in the JE that you are recording to your credit card account.

This is it, in a nutshell.  Good luck!