I don't know what's going on, why can't I figure the basics?
I have been sat playing with Quickbooks all night and I can't figure this, I know how to calculate and split between current and none current, I know how to calculate the interest I even know the notes which go in the final accounts, I even know the differences between the two leases and HP, but I can't work out the correct bookkeeping methods.
What is damn wrong with me!
All night I've been trying to work out how you can account for the invoice off the supplier for a finance lease, to get it to end up in non current assets and also the non current liabilities. One way it's as a creditor in the suppliers name, the other it's as a non current liability totally detached from the supplier.
surely it can't be Dr asset Cr Non current liability (obligations under finance lease) and no invoice?
if I do that all traceability to the supplier has gone, unless that's kept out of the accounts and in a spreadsheet.
Happens to us all at some point, don't be so hard on yourself.
Issue a purchase credit note against the purchase invoice, key it to go against the HP/Finance lease, long term / non-current account.
Enter in the description what it is, who it was bought from.
Supplier should now be nil, run the balance sheet and you should see, for eg - £50,000 non-current assets, (£50,000) Non-current liabilities.
Once you'll calculated the interest, you'll likely need to create a current liability account and a finance / interest charge account for the P&L.
Interest - Dr P&L Cr Non-current liability
To pay Dr Non-current Cr Bank
To split -
To transfer what will be paid within a year, Dr non-current, Cr current liability.
Yes you'll definitely need a spreadsheet for your fixed asset register, to know depreciation, NBV's, where the item is, if a larger business etc etc.
I know with some of the newer software - cloud, things are probably done differently, wizards and all that jazz, what I've mentioned probably is the longer way to do things today.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
