Add fixed assets bought on hire purchase
How to add a fixed asset that is being paid for in instalments, and record the repayments.
About adding assets bought on hire purchase
- If you're paying for a fixed asset in instalments, you can use a bill or manual journal to record both the fixed asset and the liability to be repaid.
- Using a bill automatically creates the fixed asset in the register, but if you don't want the transaction showing on cash reports (such as the Statement of cash flows) use a manual journal instead.
- You can record the amount to be repaid in an existing account, or add a new one. As you make repayments, code the repayment transactions to the same account to reduce its balance.
Using a bill
- Add a bill, coding it to a fixed asset account as you would if you'd bought the asset outright.
- Record the amount owed by paying the bill to your chosen account. (You may need to enable payments to the account first).
- Register the fixed asset created from the bill.
Using a manual journal
- Add a manual journal, with
- One line recording the fixed asset, and the other the amount owed.
- Show journal on cash basis reports unticked.
- Manually add and register the fixed asset.
As you make repayments, code the transactions to the same account you used to record the amount owed. Each time a payment is made to the account, the balance will go down.
To record repayments you can either
- Create spend money transactions in the bank account.
- Set up a repeating bill. If the amounts will vary, you can set the bills to save as draft so the amounts can be edited.
To split the interest from the principal, record them on separate lines of the spend money or bill, or create separate transactions.