HOW DO I PROPERLY RECORD THE PURCHASE OF A COMPANY CAR. I HAVE TO SET UP THE ASSET ACCOUNT AND THE LIABILITY FOR THE PAYMENTS.
by 
JLEE
ANSWERS: 1
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You would set up the cost of the car as a long term asset (debit) and the note due on the car as a note payable (credit) (liability). You will need an amortization schedule that shows how much of each payment is going toward principle and how much is going toward interest. Each month when you make the payment you will debit the the note payable liability account for the principle and debit an expense account for the interest. The credit will be to cash. You will also need to set up an accumulated depreciation account. If have probably told you more than you were looking for. Let me know if you want more info, need clarification, or if I have totally confused you.
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