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    Entries - purchase of assets and subsequent payments on note

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    Would you please explain how the following should be recorded?

    A building used for the primary work establishment which has a recurring payment as well as an additional interest payment?

    Vehicles used for business purposes which have recurring payments as well as an additional interest payment?

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    Solution Preview

    I'm not quite sure whether you want to know the type of account within the chart of accounts, or if you want the entry that would be recorded. To be safe, here are both:

    Purchase of building

    Debit fixed asset: Building
    Credit current asset: ...

    Solution Summary

    The solution presents sample entries to record a purchase of a building or vehicle that includes debt. The second set of entries show the distribution of payments against the note.