Entering a truck purchase or new vehicle for the business?  How do you enter this rather complex transaction into QuickBooks Online (QBO)?  It is not hard but it is quite a few steps.  You will need the purchase and sales paperwork from the dealership to enter this transaction.  There are a variety of ways this transaction can go down:  Downpayment given earlier? Loan for the truck? Trade in? Did you purchase any add on items like an extended warranty?

Truck Purchase:  Set up your asset on the books

To set up an asset account:

1. Gear Icon > Chart of Accounts.
2. On the top right click New.
3. Under the category type select either Fixed Asset or Other Asset*.
4. Select the detail type of asset (if none pertain select the closest and proceed) and then click Next.
5. Name the account.  You can call it Trucks.  Some CPA’s like a parent account Truck and then sub accounts, like GMAC 2017 and so on.
6. For the question: Do you want to track the depreciation of this asset?, click Yes or No. (If Yes is selected the system will automatically create a Depreciation sub account for the item).
7. Fill in the original cost fields. (If recording the loan, please leave this blank.)
8. Click Finish and you are done!* Consult with your accountant on what to select. Only certain types of assets will cause the depreciation question to populate.

Truck Loan:  Set up the loan

1. Gear Icon > Chart of Accounts.
2. On the top right click New.
3. Select either Other Current Liabilities (1 yr note) or Long-term Liability (more than one year note)
4. Choose the detail type of Other Current liability or Long-term liability (a description is listed to the right of each option) and click Next.
5. Name the account.  You can name it Truck loan or N/P Chase Bank or something that will help your recognize which loan it is.
6. Leave the Unpaid Balance blank.
7. Click Save.

Finishing up: Enter the Journal entry

Now that you have this in place, you will need to create a Journal Entry to record the amount of the loan to the proper accounts.Click Plus Sign (+) > Journal Entry.

The video will give you a visual of how to step through this transaction.  You may have registration fees and other items that are part of the truck purchase.  For the loan, you use the following:

Loan – Truck (liability account) – $ XXXX.XX (Credit)- Truck (asset account) – $ XXXX.XX (Debit)

Add on from there.  Document or registration fees will also be debits.  The downpayment (like the example in the video) may be a truck you turned in.  In this case, you credit the asset account to lower it.  In the final journal entry, the credits and debits must equal zero. In the above example we are increasing, or crediting, the liability/loan account and increasing, or debiting, the appropriate asset account.

Make sure to scan and attach your document to the transaction.  To see another post regarding saving attachments, click here.

Last piece of advice: When in doubt, contact your accounting professional

If this whole transaction just seems like to much to handle (which my husband calls “above my pay grade”, seek out your CPA for guidance.  You want your records to be correct.  A quick phone call or email is much better than guessing how to enter it and getting it wrong.  To see an article from the IRS regarding purchasing a truck and section 179, click here.

I hope this video helps those of you that want to tackle this transaction on your own.  If you have any questions or would like to see a future video on another topic, please reach out to me on Facebook.