Hi.
I have place order of New Holland round Baler. Order will come in at around in May. Deposit $4,000 paid by cheque. Now what transaction should be look like?
Is deposit become asset or cash asset or liability?
Thanks.
Allen
Hey Allen, Post that as a withdrawal and then balance it with an A+ line to Prepaid Items (1220-00 or somewhere near there). When you get the baler in the new year and make the final payment then you can use the $4000, from prepaid items along with however much else went into the purchase to create your C+ line and add the capital asset to your books.