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chrissy17_n · Mar 21, 2010, 01:29 PM

Purchase 235000 in equipment and paid additional 15000 to have it install. Took out a loan(on note) to finance the equipment purchase. The 250 000 note was to be repaid in one year with 12 % interest on note. How do I enter this in journal

chrissy17_n · Mar 22, 2010, 05:54 PM

Need help many views no answers :(

morgaine300 · Mar 28, 2010, 01:16 AM

You need to be patient. Posting a second time won't get you an answer any more quickly. Lots of people look at posts, but it doesn't mean they can answer your question -- it's not like they're ignoring you just for the fun of it. (As a matter of fact, I personally start with the oldest, where I left off the last time I was here... I would have seen it last time I was here if you hadn't "bumped" it by posting again on it.)

All costs to purchase, get (transportation), tax, insurance, make ready, install, etc. all count into the cost of an asset. Taking out a loan to pay for the asset into the future does not count. Therefore, what cost are you doing to count?

As for the entry, do you have any ideas? We're not actually here to just give answers to you. Tell us your ideas and we can tell you if you're right.

chrissy17_n · Mar 28, 2010, 07:48 PM

Debit equipment 235 000
Debit service 15000
Credit Note payable 250 000

That is what I have for my journal entry

morgaine300 · Apr 6, 2010, 09:09 PM

Sorry for the long delay and don't know if this is even relevant anymore. (Been a little busy.)

The 15,000 is part of the cost of the equipment and being such, belongs in the equipment account as well. Note where I said all the things that are part of the cost of the asset -- it includes installation. So that 15,000 is part of the whole cost.