[ckmac4]

We purchased a vehicle for our business and I coded it in quickbooks as a long term liablity, but the monthly payment is not reflected on my P & L Statement, what did I do wrong?

[ArcSine]

With a typical amortizing loan, each monthly payment comprises two components: Some portion of the payment is interest expense, and the remainder is a reduction (paydown) of the debt balance. Usually these two components change their relative proportions each month.

For example, suppose I have a loan that requires an $800 payment every month. In one month, that payment might be $430 of interest and $370 of debt paydown. Next month it might be $427 of interest and $373 of paydown, and so on.

Only the interest expense portion of each month's payment hits your P & L. The paydown portion debits (reduces) the long-term liability you established on your balance sheet.

You'll need to obtain--or prepare--an amortization schedule for the loan, and then each month you'll record the monthly payment as a debit to interest expense, and a debit to the liability account, with the amortization schedule showing you these particular amounts each month.

[morgaine300]

Not to mention that nothing will show up on a P&L statement unless you charged it to an income statement account in the books. Quickbooks doesn't know any better unless you tell it. Regardless of the dollar amounts, you're the one who still has to charge that portion to the expense account to get it to show up properly.