How to record Purchase of Fixed Assets?

Let’s see how to record the purchase of Fixed Assets

Step 1:

You need to create an account for Fixed Assets through Accounting > Chart of Accounts

Like shown in the above image, fill in the details :

Account Name : Enter the name for the Fixed Asset
Account Group : Select Fixed Asset from the drop down
Effective Date : Select the date
Opening Balance: Enter the opening balance (purchase amount of fixed asset)
Depreciable Yes/ No : If its depreciable select Yes
Depreciation Rate : Enter the depreciation rate
Save : Click on Save and it’s done.

Step 2:

After creating the Fixed assets let’s see how to pass a journal Entry for the same.

Accounting > Chart of Accounts > Journal Entry, click on add new record.

Step 3:

Select the Fixed Assets account from the drop down. enter the date.

Enter the purchase price in debit column, and credit the cash account/bank account for the same amount.
User can add description in the description box.

To record the purchase of a fixed asset, debit the asset account for the purchase price, and credit the cash/bank account for the same amount. If the fixed asset is purchased on credit than credit the vendor account in place of cash/bank account.

Leave a Comment

Your email address will not be published. Required fields are marked *

Start Subscription Today!

Issues invoices, track your expenses, inventory and projects in 1 simple to use application. 

Pay $0 For The First 14 Days​

$18USD will be charged at the end of the trial period.