How do you record new equipment leases on wave

MMaynardMMaynard Member Posts: 4

Recently purchased new printer for my business, which is under a 5 Year lease, how do we record with wave, payments , value etc

Comments

  • LagoFinancialLagoFinancial Member Posts: 9

    Hello @MMaynard,

    You would record the purchase against a new Asset account you would call Printer and the loan against a new Liability account you can call the name of the creditor. The printer will be depreciated over its life, or Section 179 expensed entirely, and the payments posted against the specific Liability account you created. This entry would be a Journal Entry.

  • MMaynardMMaynard Member Posts: 4

    Thank you and greatly appreciated , could you give me an example of the journal entry for the lease payments debit/credit etc

  • AlexiaAlexia Administrator Posts: 3,314 admin

    Hi, @MMaynard.

    I can chip in on this one! Here's everything you'll have to do:

    • Create two accounts on your Chart of Accounts: an asset account for the printer and a liability (Other Long-Term Liability) account for the lease.
    • Create a journal transaction that debits your Printer asset and credits the liability of your lease, each for the total amount you'll owe.
    • When you make a payment, just create a bill on the Bills page and choose the liability account you created for your printer's lease as the category.

    Does this help out?

  • MMaynardMMaynard Member Posts: 4

    Yes it does thank you, for the asset account, do i put the full value of the lease, or current value of machine, example value of printer is 3000, but with total payments of lease it will come out to 4586

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  • EddoEddo Member Posts: 1

    Hello, I got almost the same difficulty with my transactions. So here is my condition:
    1. I am renting my trucks to people. So definitely truck is my asset (equipment).
    2. Let's say on 01 Jan 2019, I bought 1 truck for $1,000 and I leased it for 12 months with 20% interest per year. That would be $100 per month for 12 months.
    3. At the time I bought the truck, I gave the seller 12 checks, @ $100 with due dates of 01 Feb 2019, 01 Mar 2019, 01 Apr 2019 and so on with the last check dues on 01 Jan 2020

    Can somebody please tell me how to put these transactions into Wave? From the buying process, the payment and the check clearing transactions?
    Thank You very much

    edited July 3, 2019
  • JamieDJamieD Administrator Posts: 1,117 admin

    Hey @Eddo.

    I feel like in this situation, this might be the best route you take since this asset has been loaned/leased to you:

    You will want to create a lease liability account for the truck and in order to account for that transaction, you will want to debit the Asset and then credit the lease (for the buying process). With each repayment, you will want to debit the lease, debit the interest and credit your bank account (with the journal transaction that has been created -- this is for the payment).

  • hypehype Member Posts: 2

    I have a new computer equipment lease for $5,300. I created a journal entry as described above, debiting the Asset (named it "Leased Computer Equipment") for $5,300 and crediting the Long-term Liability (named "Apple-CIT") for $5,300.

    When I went to create the first bill as described above, my newly created Expense category isn't showing up in the list under the Liability heading (only the default "Payroll Liabilities" is showing in the list). Right now, I've chosen "Computer Hardware" as the expense category, but that doesn't seem right if I'm following the line of thought as outlined above.

    When I created the payment record for this bill, I wasn't sure which account to make it from: the Liability "Apple-CIT" account, or the Asset "Leased Computer Equipment" account?

    Help?

  • MikegMikeg Member Posts: 654 ✭✭✭

    @hype,
    Speaking from the US, when a business leases equipment you typically just expense the payments. This because the equipment does not belong to the business. Hope that makes sense.

  • hypehype Member Posts: 2
  • MikegMikeg Member Posts: 654 ✭✭✭

    No problem. I would not set up a liability because there is no offsetting debit.

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