I have bought a car, made downpayment , and how to post all this plus posting financing payments in Canada?

How to post car purchase, down payments and post finance payments in Canada?


You now have 2 new things - a car, and a loan. Each of them go on the balance sheet in a matching account. The car is a fixed asset, the loan is a long term liability.  If you have more than one car they can share the same account.

Create a vendor bill for the car using the dealer invoice showing the total cost including taxes.  Then enter a pay bill transaction for the amount of the down payment.  Now go back to the vendor bill and add a new final line in the 'expense' tab and code the loan account with a negative amount to reduce the vendor bill to zero.  This is the amount you have borrowed initially.

All subsequent payments are made as cheques to the loan account (likely which also have to add interest onto)

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MikeinBC , CPA-CMA

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