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Old 02-29-2016, 01:23 PM
dale138 dale138 is offline
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Post Auto Loan

Setting up a 3 year auto loan. Am I correct in defining the account type as long term liability with no beginning balance? Any suggestions welcome. Peachtree complete 2013

dave
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Old 02-29-2016, 06:59 PM
jdierkhising jdierkhising is offline
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Yes the account type for any loan longer than 1 year should be Long Term Liability. Then you would typically do a journal entry to Debit the Fixed Asset Vehicle GL account and Credit the new Auto Loan GL account.
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Old 08-05-2016, 01:55 PM
Gabriel Gabriel is offline
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Auto loan - long term liability

Yes typically you would set it up as a long term liability. However, your bank or shareholders may want to split the liability between short term and long term. In the short term you would do an entry equivalent to 12 months of payments and the balance as a long term liability. When you first set the loan, your payments go towards the long term liability. Once you balance is 12 months and the long term liability is zero, you switch the payments to go to the short term liability. More complicated, but more accurate of the short term cash needs of the company.
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