JO
@Johncopp
10 points

John Copp

Last activity 2 years ago

Signed up 2 years ago

JO

If the machine is paid for with a check at the time of purchase as stated in the question, it’s a straight forward transaction with a simple book entry.

The entry would be:
DR - Assets, Capital Machinery
 CR - Assets, Bank Account

In addition, depreciation accounts needs to be set up at the same time:
Depreciation, Capital Machinery (an Expense account)
Accumulated Depreciation, Capital Machinery (a Contra-Asset account)