Hello,
The Central AC, which is now over 25 years, is being replaced. It will also replace the heating furnace. We paid the initial deposit and the remaining amount to be paid at the end of the new installation. What is the best way to track this expenses? I believe this should be tracked as Capital Expense, but how do we enter the two payments?
Thank you
Inverse of ‘Split’ feature, it would be nice to “combine” multiple payments into a single transaction.
@jaiminswita You may get a few different answers but it is my personal opinion that the transaction is not complete until the final payment is made and the system is installed. I suggest to enter the full dollar amount on the date you paid in full. Yes, this type of transaction would be a capital expense. Consult with your tax professional to determine useful life of the system and the length of the depreciation schedule, which is dependent upon your business operations.
Side note to other readers - this should not be confused with financing payments where the payment structure is extended out over several months or years. Behind the scenes, the company lending the money actually paid the vendor in full, triggering the completion of the transaction. Following this event, you’re just making payments to a third party. Don’t forget to record the interest on those payments, if applicable.
-Tom
www.realcentsorganized .com
Thank you, @tlatuga. I can add a manual entry at the end of the project for this new HVAC.
I will also have to manually remove the synced transactions from the bank as the deposit and final payments are separate checks. That’s why I feel there should be a “combine” option to make them a single transaction entry.
@jaiminswita I understand what you mean. It is a downside to syncing financial accounts, as they all handle things a little differently and cannot anticipate all situations.
-Tom
www.realcentsorganized .com