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edvard
September 21, 2020
Question

Recording a hire agreement that existed before I had quickbooks

  • September 21, 2020
  • 1 reply
  • 0 views

I recently started using Quickbooks; I wish to record my hire purchases e.g. a vehicle, a laptop etc.

 

From my understanding I need an asset account and a liability account for each in my chart of accounts.

 

However, I am unable to find a tutorial that does not assume the hire purchase agreement is new.

 

These hire agreements began before the 1st April 2020; however, I only wish to match transactions for this financial year i.e. after 1st April 2020.

 

How can I configure these accounts without importing and matching payments prior to 1st April 2020. 

 

If anyone is kind enough to respond please may you consider, if an agreement was longer than 12 months on its outset but is due this year, if it should be recorded as a non-current or current liability.

 

Thank you in advance,

 

Edvard

1 reply

Angelyn_T
Angelyn_T
September 21, 2020

Thank you for choosing QuickBooks and welcome in the Community forum, @edvard.

 

I've got here the steps on how to record a hire purchase agreement in QuickBooks Online. I'm happy to share them with you.

 

Yes, you have to create an asset and a liability account from the chart of accounts. If the hire agreement is 12 months or less, set up a Current Liability with Loans Payable as the detail type. If it's more than 12 months, use the Non-current Liability account type with Notes Payable as detail type. Then, create a Tangible Asset account with an appropriate details type.

 

  1. Click on Accounting at the left pane, then select Chart of Accounts.
  2. Tap New.
  3. Fill in the necessary details from the Account window.
  4. Hit Save and Close.

Once done, record a journal entry for the agreement made by selecting Journal Entry from the (+) New icon. You can use the asset account for the debit column and the liability under credit with their corresponding amount. If you need additional help recording the entries, you can always, seek help with a professional accountant. This way, they'll be able to guide you with accounting matters accordingly.

 

After recording the asset value and the amount owed on the hire purchase, you can now start entering your initial payments.

 

For your detailed guide, check out the steps provided from this article under the Record your initial payments section.

In case you need related resource while managing your expenses in QuickBooks Online, feel free to read the topics from this link: Expenses and suppliers QBO.

 

That should point you out in the right direction today. Let me know if you have any other questions. I'm a post away to help. Keep safe always!

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