Add a new vehicle purchased with finance company

Question

Which accounts do I debit and credit when adding a vehicle purchased on finance?

DuncanS · Answer

@Lo2007 @Earl_HD

Hope your Accountant is Online.

Accounting for Cars is complex.

Ledgers may include -

Car    eg Ford Ute May 2024   I include the Rego Number

Depreciation and GST Limits apply

Private Use is considered

Interest on Loan eg  Interest WBC Loan  Ford Ute

I do monthly Journals for the Interest (refer Amortisation Schedule)

Loan Repayments   eg WBC Loan $888 by 48 months

Balloon eg WBC Loan Balloon $10,000 April 2028

Depreciation of the Car   eg Ford Ute May 2024 Accum Depn

I do monthly Journals for the Car Depreciation

Duncan

Earl_HD · Answer

Hi @Lo2007,

Thanks for your post. In scenarios like this, we recommend consulting an accountant to ensure you get an accurate solution. Additionally, I suggest visiting this post for more detailed information. Car finance loan and GL

Feel free to post again, we're happy to help!

Regards,
Earl