I bought a computer from a supplier .The total price is 1200 euros.
I have to pay it in six monthly instalments.
How can I record this?
Enter the transaction as a purchase invoice. When its time to pay, pay only the monthly amount. Manager will show that purchase invoice with a reduced balance due. Meanwhile, the declining liability will remain in Accounts payable.
Whether to set up the computer as a fixed asset depends on local regulations. But that only affects where you record the initial purchase, to Fixed assets or some expense account.
If the payment period were longer (typically over a year), you might create a loan liability account and post payments to it. But in most jurisdictions, payments over a six-month span would not require that. The six payments are simply the terms of the purchase agreement.
I have a question, since this topic has come up. I was in a similar situation to @AthKyro about 12 months ago.
Last financial year prior to using Manager, I purchased a laptop from a supplier and entered a repayment plan. The terms were 12 months interest free, and every month there was a small account fee (let’s say $5.00).
I paid it off in 5 months, which means I ended up paying off the cost of the laptop + about $25.00 in fees, but no actual interest. The five months were all contained within a single reporting year.
How would you represent this? My assumption would be that you’d enter the initial transaction (cost of laptop) as a purchase invoice as you indicated, and make payments on it over time, gradually lowering the Accounts payable.
However - the question I’m leading to: I’m unsure how fees would be represented in this case. Would you create a new Purchase Invoice each month for the credit card supplier with the fee amount? Or use a Journal Entry in some way to increase Accounts payable (but which account would you lower)?
In this case, it’s unknown up-front how long the payment term is, so it’s unknown how many monthly fees of $5 will apply before it’s paid off. So the initial record can’t include the fees.
The credit card supplier was used exclusively for the laptop, and for nothing else. So any fees (in my mind at least) are associated with the laptop purchase directly.
Firstly, your Supplier should be the credit provider as that is who is giving you the payment terms, not the retailer as they have been paid. Then your monthly fee would be entered as a Purchase Invoice as it increases the amount payable to the Supplier. To my mind, the fees would be an expense, not an addition to the asset.
Calculate the equivalent interest rate (because that’s really what the fee was). You’ll wish you’d borrowed from a loan shark. 
Seriously, there are several issues involved. The first question is who financed the purchase. Was it the supplier who sold you the laptop? Or a finance company of some type? Or the credit card issuer? Your explanation isn’t quite clear.
The second is whether the the fees were interest, regardless of what they were called. Interest is often defined as amounts paid for the use or forbearance of money. These fees seem to fit that test. And depending on local law, that might make them deductible, even if non-interest “fees” are not. Either way, though, the fees are a business expense and will reduce net income.
The third question is whether you treat the laptop as a fixed asset. Here, local law governs. The economic life is certainly longer than a year (the common threshold). And the capitalization limit was likely exceeded. I concur with @Brucanna that the fees would not add to the cost of a fixed asset.
Fourth, you would not do anything to increase the purchase invoice value of the original purchase. That transaction is now history, wherever it was initially posted. It generated an account payable that does not change. So a monthly payment would be divided into two line items. One would post to Accounts payable and the supplier. The other would post to an appropriate expense account. These are separate from any depreciation entries if the laptop is treated as a fixed asset. The foregoing assumes the supplier is the entity to whom you are paying the fees. If you are paying the fees to someone else, you need to payment transactions, but the account postings are as described.
This fact actually supports a weak argument for including the fees in the cost of the laptop if it is being treated as a fixed asset. Your situation is almost like a reverse discount, where you pay X on the sale date, X + 5 a month later, X + 10 in two months, etc. The payment entries wouldn’t change from those described above, because you must account for the outgoing cash. But you would then journal the fees to the purchase cost of the fixed asset. Kind of cumbersome and probably counterproductive, because capitalizing the fees delays your ability to recover them (through depreciation). Treating them as a current expense gives you the deduction now.
The business you are making the repayments to.
No, otherwise, based on the fixed amount ($5), the interest rate would be escalating as the balance reduced. Mth one $5 on 100% of owing, mth 12 $5 on 8.33% of owing - assuming equal 12 mth instalments.
The original purchase invoice was never being amended, but each fee charged was been taken up by its own purchase invoice as the date being charged the fee and the date of the payment would probably be separate.
Lets say the credit provider sent a monthly statement being the purchase balance plus the monthly fee. The statement balance and the supplier’s accounts payable balance wouldn’t reconcile if the fees were ignored.
When the credit provider charges the account with the fee (say 1st of mth) they aren’t posting it as a cash transaction yet the Spend Money two line item approach detailed implies that the fee is a cash transaction as its not part of the accounts payable.
My point was: which business is that? If it is a separate company, you cannot use the two-line approach. And I asked, as I said, because the post wasn’t clear to me.
That doesn’t mean it isn’t interest. Not a favorable business deal, perhaps, but it can still be interest.
Yes, it does. And that’s perfectly acceptable since you are not carrying the fee forward on credit. Instead, you are paying it in the current month. The statement does not create additional obligation by itself. There is no reason you must enter the monthly fee as a purchase invoice. Note that I said “you would not do anything to increase the purchase invoice value of the original purchase.” You would still be free to enter the fees as additional purchase invoices or handle them as cash transactions (meaning purchases not made on credit), whether paid from a bank or cash account.
Thanks for the comments, I think I understand the situation a bit better now. As I said, this occurred last year, but it got me thinking how to represent it in Manager.
I don’t want to redirect too far away from AthKyro’s original topic / question.
Just an interesting note on this:
The “capitalization limit” as you called it was $20,000 at the time, which easily covered the laptop. Usually the limit is $1,000 but the ATO (Australian Taxation Office) expanded that to an unusually high $20,000 last year and this year, allowing even a business vehicle to be immediately written-off. No multiple-year depreciation necessary.
Details about the increased limit (in case you’re interested): https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Get-your-$20,000-instant-asset-write-off/
Now the part I’m not as certain about, is whether the laptop is a fixed asset. It was immediately written-off at full value (about $2,200) as per my comments above.
For now, I had entered it into Manager as an asset with no purchase price and no depreciation. I was going to figure out what to do with it later, if I ever sold it, etc.
Perhaps it’s worthwhile me setting a ‘starting balance’ for Purchase cost (not including the $25). And then Accumulated depreciation would either be zero, or equal to the purchase cost, I assume. Not sure which.
However, I’m steering too far away from original topic now. I can create a new thread if I need to explore my question in more depth.
@AthKyro please let us know how you went with Tut’s reply to your question 
The situation you describe has become relatively common. The provision in the regulations that allowed the accelerated depreciation, or current expensing, or whatever ATO called it will determine how to handle this. If only the capitalization limit was increased, you would not treat the laptop as a fixed asset at all. In other implementations, the item is still considered a fixed asset, but accelerated depreciation is allowed as a current expense. In some of those situations, there are recapture provisions if the asset is retired early. Find a little more information in this Guide: https://www.manager.io/guides/7277.
“The credit card supplier was used exclusively for the laptop”
“each month for the credit card supplier with the fee amount”
“The terms were 12 months interest free”
To be accurate, the Australian Government as a budget measure expanded it, the ATO only administers.
You actually answered yourself - “to be immediately written-off”
Enter it as a Fixed Asset at purchase value and then 100% depreciate it, otherwise known as accelerated depreciation.
This way the management accounts have a record of the business’s assets while allowing for the taxation incentives of the day.