Company bought a vehicle using chattle Mortgage. So I set up a loan account so pmts each month can go to it. My question is how do I enter the purchase so I claim the 10% GST If I transfer $$ from loan account to petty cash & write a chq from petty cash I get the GST OK, but I also get the vehicl purchase price appearing on my P&L which is not correct - I think?
Any help appreciated.
UsingQB2005 Australian Version
What's petty cash got to do with it?
I don't know but if I had to do that I would set up a liability account for the moorage of the vehicle. Do the GST bit and charger the net vehicle cost (per moorage company) to that liability account. Book the monthly payments to that accounts. Once the vehicle is paid for, the balance on the liability account will be 0 (zero).
I also would call the accounting department of the moorage company and ask them. You may not be the very first person who needs to know and the just may be glad to assist you.
Fred
If the company is a cash payer for the GST, make sure that the loan is a chattel mortgage - it makes a difference to the way you claim the GST input tax credit.
Here is the best way I know how, and I am assuming that no cash changes hands (in other words, borrow 100%). You should be able to work out the rest from that.
Debit Motor Vehicles GST code is CAG for say $20000 (GST 2,000) Debit Unexpired Interest for say $5,000 for the full interest component of the loan Credit Chattel Mortgage Loan for $27,000.
If there are other charges (registration, insurance, setup fees etc) debit those to the appropriate expense account or load them into the vehicle account.
Each monthly payment is then say, 1/60 of the full loan, and the interest is amortised as 1/60 of the unexpired interest.
You do it in a cheque as so
Payment is say $400
First split line
Chattel mortgage loan $400 Interest Paid NCF code $56 Unexpired interest -$56
You should set up non-current and current portions of the loan, but that just complicates the simple illustration.
I hope this helps
Bob Williams (in Oz and an Accredited Consultant)/CPA
charlesmh2000 had written this in response to
------------------------------------- Bob Williams wrote:
##-----------------------------------------------## Newsgroup Access Courtesy
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.