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What's the best way to record the purchase of a combine that's going to be paid off over the next three years, with two payments being made, by cheque, to the 'Supplier' a year? The first payment by cheque is due in February.
Hi EvaKW!
The best way to deal with a transaction such as this is to do the original purchase as a Payable Charge.
In your transaction entry screen, change your transaction type to Payable charge. Enter your date of purchase, per the bill of sale. You will have to enter the supplier you purchased the combine from (if you don't have the supplier set up in the system, simply add it on the fly). Enter a reference number, and make sure your total is the FULL purchase price of the combine.
In the detail, do your capital asset purchase (C+) and set up the combine in Class 10. Record the transaction when it is balanced. Instead of being withdrawn from the bank account, it will be posted to account 2100, Accounts Payable.
When you write your cheque, do a withdrawal from your bank account. Fill in the top information the way you do with any other cheque.
In the detail, change your type to payable payment (PP). Select the supplier you originally posted the charge to. You are now free to apply the payment against the original invoice. When you record the payment, the amount in accounts payable will decrease. By the end of the last year, the amount in your accounts payable should be decreased to 0.
Hope this helps!