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Posted by Bob Williams on January 10, 2007, 9:18 pm
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fredbear2412 wrote:
> Company bought a vehicle using chattle Mortgage.
> So I set up a loan account so pmts each month can go to it.
> My question is how do I enter the purchase so I claim the 10% GST
> If I transfer $$ from loan account to petty cash & write a chq from petty
> cash
> I get the GST OK, but I also get the vehicl purchase price appearing on my
> P&L
> which is not correct - I think?
>
> Any help appreciated.
>
> UsingQB2005 Australian Version
Fred
If the company is a cash payer for the GST, make sure that the loan is
a chattel mortgage - it makes a difference to the way you claim the GST
input tax credit.
Here is the best way I know how, and I am assuming that no cash changes
hands (in other words, borrow 100%). You should be able to work out the
rest from that.
Debit Motor Vehicles GST code is CAG for say $20000 (GST 2,000)
Debit Unexpired Interest for say $5,000 for the full interest
component of the loan
Credit Chattel Mortgage Loan for $27,000.
If there are other charges (registration, insurance, setup fees etc)
debit those to the appropriate expense account or load them into the
vehicle account.
Each monthly payment is then say, 1/60 of the full loan, and the
interest is amortised as 1/60 of the unexpired interest.
You do it in a cheque as so
Payment is say $400
First split line
Chattel mortgage loan $400
Interest Paid NCF code $56
Unexpired interest -$56
You should set up non-current and current portions of the loan, but
that just complicates the simple illustration.
I hope this helps
Bob Williams (in Oz and an Accredited Consultant)/CPA
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