 QuickBooks Desktop 2023. Purchase and finance equipment and create loan subaccounts. Let's do it within 2-its QuickBooks Desktop 2023. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitars practice fire we started up in a prior presentation going through the setup process we do every time maximize and the homepage to the gray area going into the view drop down noting we've got the hide icon bar open windows list checked off open windows open on the left reports drop down company and financial t and l profit loss change that range from 010123 to 123123 customizing founting and numbering changing to 14 oh yes k and then we're going to go to the reports drop down again company and financial this time the balance sheet customize it to change in the range in 010123 to 123123 fonts and number going on up bring it up to 14 oh yay k there's the setup process that we do every time we're now focusing in on the purchase of property plant and equipment the fixed assets and we're going to be financing the purchase of new fixed assets before we do so however let's take a step back and think about why property plant and equipment is a little bit different than other types of transactions that happen in the normal course of the accounting process in the prior month we started out our file with some transactions that are typically unique to the start up of a new company that being the need for capital the need for money which often comes from us the owner or comes from alone we then took that money to buy the things necessary in order to generate revenue in the future that typically being property plant and equipment machinery and whatnot and inventory if we're selling the inventory so we when we did that in the prior month we made the purchase of property plant and equipment with the cash that we funded into the company another common way that we would be purchasing property plant and equipment is to finance it as we purchase it so if we bought like a forklift or something we might have to finance it meaning take out in essence alone as we purchase the property plant and equipment that's the transaction we'll focus in on here so before we do that let's jump to the homepage or as we do that let's go to the homepage and note that the purchase of property planting equipment doesn't really fall into any set form none of these forms are really designed to purchase specifically property planting equipment because the purchase of property planting equipment doesn't happen on a daily basis it's not part of a normal cycle it's something that only happens periodically throughout the year you don't purchase property plants and equipment all the time in other words therefore we have to think what would be the best form since there's not a form designed specifically for the purchase of it if we were paying cash or doing an electronic transfer then we might still just use say a check form or possibly the bank feeds and let it fall through or roll through the bank feeds but if we're financing it then we might have to use some other format meaning for example if we're financing part of it and paying cash for part of it then we might still be able to use a register decreasing the cash and also recording the loan that's going on the book books within the register that's one way we can do it or if there's no other form we can use a journal entry if we're financing the entire thing for example making a journal entry this way that would use debits and credits we could also to make a journal entry enter it into a register so if we're not using the cash register we can use some other accounts as registers as well and we'll try to take a look at some of those methods we'll look at the register and we'll look at the journal entries but before we do we're going to go to the lists we're going to go to the item to the chart of accounts here now we're going to be adding another loan account as we do this what's going to happen the property plants and equipment is going to go up when we purchase it the other side is going to go into a loan we already have a loan account set up however that's a different loan so now we've got the problem of of do I want to have multiple loans going into the same loan account so we had a bit of a discussion on this before because remember if you go into the balance sheet and we go into this loan account when we report the loans we want to typically have a short-term loans and long-term loans current and long-term and oftentimes if we have loans that are extending beyond one year we will have a current and long-term portion of them however we don't want to have two components of one loan because that makes it difficult to tie into the amortization table so we suggested only having one loan I'm going to have a current liability loan even if there's a long-term component to it so I can tie into the amortization schedule and then break it out periodically using adjusting entries at the end of the month or the end of the year and then we'll reverse the entries back into one account the other issue is that if I have multiple loans I would like to have a separate account for each loan because that will make it easier for me to tie into their individual amortization schedules so what I want to do is make one overarching parent loan account and then make some sub accounts which will tie into the loans allowing me to collapse the columns and expand them as necessary so to do that let's go back on over to the chart of accounts and and this second loan account let's I'm going to right click on it and I'm going to edit this this one I'm going to edit this account and I'm going to make this specific to a particular loan so let's call this one the I think we purchased it with Chase so I'm going to just going to call it chase chase loan right and I'm and you might put the last four digits two seven nine one of the loan number now chase that's not how you spell chase chase is a bank loan so you might try to distinguish the loans from by the institution that you borrowed from but clearly you might have multiple loans from the same institution in which case you might distinguish him with the account number this isn't great for external reporting because you don't really want to give the account that kind of muddies up your reporting but it is quite nice for internal reporting which is why it would be nice if we can have a parent account that we can collapse this into so I don't have to show loan numbers on the reports I'm giving to others but I can still have it for the internal data so let's see how that would work I'm going to say save it so now we've got it looking like this I'm going to make a parent loan account which will just be called loan payable now so I'm going to go and say let's say account rise up new I'm going to make this the parent account it's going to be a loan type of account I'm going to say it's in well let's just say loan type of account that's what it's going to be and this is going to be a loan payable now this is just the generic name because it's going to be the parent account loan payable hopefully I'm spelling things payable it doesn't look right payable okay and that looks good I think that's right so let's say save it and close it that's a current liability account okay and then I'm going to make the other loan account be a subsidiary account to that one so this one I want to make it subsidiary to the loan payable let's right click on it let's edit it again we're going to edit the account and I'm going to say make it sub subordinate subsidiary to the loan payable account there we have it so then I'm going to say okay that gives me this nice little breakout and if I see that on the balance sheet now now I've got this chase account which I can tie into a specific amortization table and for external reporting I can collapse it into just the loan payable account without having those account numbers and all that funny business now we're going to start another loan so I'm going to make another account for another loan which I'm going to put subordinate to the loan payable account this is the loan I'm going to take out when I purchase the new piece of equipment and finance it with a new loan so I'm going to go to the account rise up and say new and we want this to be a loan again and continue and let's call this a B of a loan and I'm going to pretend the last four digits of the number is 5574 and the loan number make it subordinate to the loan payable account loan payable once again so now we're going to say save and close so now we've got our two loans here under the loan payable account all right so now I want to record my transaction now I'm going to imagine that we're we're purchasing equipment for $5,000 here so the so there's no transit since cash is not impacted I can't really use the checking account I have to use some other account so I could use a journal entry and we will look at the journal entry the debits and credits but we can also use a register notice that everything that's above the income statement here stops at the income statement have these balances that indicates that there's a register related to it so I can go into the register just like we can with the check register in essence and record things as if they're an increase or decrease as opposed to debit and credit and this works well if you only have like two accounts impacted if you try to think that through with something like payroll transaction where you got a whole bunch of transactions a whole bunch of accounts in one transaction I should say then it gets confusing so so then the question is well which one do I want to use I can I can go into my chase account here or the other one I can go into the equipment rental either one to to enter the transaction in a register would work I think oftentimes people like it's a little easier for people to envision the asset so let's go to the asset account first which where is it so we're going to put it into furniture and equipment I'm going to double click on furniture and equipment we're going to buy more of it but we're going to finance it on 0 to 27 to 2 let's say and then the payee is going to be I'll say I'm just going to call it Bank of America this is who we're taking the loan out from I'm going to say quick add vendor I'll keep it as vendor although it probably should be other and I'm going to say 5000 and then the other side is going to go to the loan payable and so notice we're not really thinking about debits and credits I'm just thinking well oh hold on a second this needs to be an increase of 5000 I'm just thinking increase of 5000 the other side should go to loan payable but it's going to go to the new loan we set up the b of a loan here and this is for the finance finance of equipment equipment now something that that you want to keep in mind here is that the equipment is going on the books as an asset we're not we're not expensing it when we purchase it and we have to do that for for our tax needs the tax code is going to force us to do that even if we're on a cashed based system so what you need to do then is to is to mark off what you actually purchased especially if you purchased multiple things for one one lump sum price like multiple computers or something like that or multiple forklifts or whatever you want to then be able to list out in your description here each of those items and how much they cost because you're going to have to put them on the sub ledger which isn't in QuickBooks but usually is run by the tax software because the tax software has to run at least tax depreciation schedules and since you already have the data in there it can also run the depreciation schedules for book value book depreciation if you want them to be different so what you have to provide to your tax professional or using your tax software is not just the lump sum the description of what you have so that they can put it on there and you will be able to identify which items they're referring to now notice it won't be a problem if you just give them this lump sum and it represented like 10 things when they put it on there but if you were to sell or dispose of equipment in the future one of five things then and they put it on the books at just one lump sum they're not going to you're not going to be able to identify the thing that you sold right that's the problem so you want to be careful of that when you're giving it to your your tax professional and you're doing the sub ledger and the depreciation we'll talk more about that when we get to the adjusting entries but there it is if i double click on the journal entry if i double click uh so i put it in 2022 i'm going to make it 2023 i keep thinking i'm in 2020 i am in 2022 okay give me a break i'm working in the future so there it is if i double click on it there's the journal entry now i typically like to go into the journal entry and and just copy my my memo so there's the memo which should be more descriptive but we're going to say save it and close it boom close this out bam and then go to the balance sheet so in the balance sheet we can see now we got this $5,000 loan going into that there's the journal entry if i go into the journal entry it takes me to the register quickbooks tries to avoid as much as possible basically debits and credits so even when it says journal entry it'll often take you to a register but you can get to the debits and credits by going into the double clicking here and that just kind of emphasizes our so the wake quickbooks work closing this back out closing this back out closing this the wake quickbooks works is first as we saw when we started our new company file when you go to the homepage it will look for a form that that will record the transaction if there is no form that records the transaction then it will typically have to use a journal entry form but it will normally default to the register when you kind of drill back down on it as opposed to the journal entry debits and credits okay so then going back on over i can collapse this if i want to report it externally like so and then we can go into the equipment went up up top so i put it just into furniture and equipment so if i go into that there's our journal entry there as well and then closing this out now notice that just a quick recap on the fixed assets we probably want to group our fixed assets in the same way that they're going to report on the sub ledger which will be shown in the tax software so meaning the groupings of furniture and equipment automobile and so on you probably want to tie out to the tax software to make the adjusting entries as easy as possible for the depreciation also you you want to make sure when you add new equipment that you not only have the dollar amount but you save the documentation for the equipment and the identification numbers so you can go from the sub ledgers to your actual equipment so if you sold the equipment in the future you know exactly what piece of equipment you sold so that you can properly do the bookkeeping in the future and notice you don't have to worry so much about the prior balances of equipment because they will already be on the tax software so there will be continually depreciation going on them in the future what you have to give to the tax preparer or input into your tax software are the transactions that increase and the disposals of equipment which shouldn't be that many because equipment unlike sales unlike invoices unlike expense forms aren't that numerous you only buy a few things possibly each year you know for equipment as opposed to making hopefully hundreds and thousands and tens of thousands of sales of stuff so we'll get more into the the depreciation of the equipment in a future presentation when we do the adjusting entries and we'll talk more about the formatting of the equipment in a similar way as we talked about the formatting of the loans payable meaning we could have sub accounts you could have a sub account for each equipment accounts each fixed asset account and so on we'll get more into that later so that's it for now then notice there was no impact on the income statement there will not be because we purchased property plants and equipment there would not be even if we paid cash for it it's not because we financed it there will be in the future an impact on the property the the profit and loss the income statement when we depreciate the equipment all right and so let's go to the reports drop down and go to the to the account and taxes the trustee tv trial balance 010123 to 123123 and then customize it font numbers changing to 12 let's bring it up to 1612 we left 12 a long time ago i was 12 back in the stone age i don't know what i'm doing anyway so check your numbers here if they tie out great if not then try date changing date range because you might be doing date messed up which i demonstrate often these days for some reason but i'll remember next time my i won't have any date issues on my data entry next time i promise probably but uh so and we will be taking look at the transaction detail report at the end of the month of data input so we can double check our numbers then