I have have searched without success for the last 3 days and either it’s not out there or I don’t know enough about accounting to know what to search. But if I put my equipment loan in liabilities and I go to make a payment. I want the full amount to come out of my bank account, the principal to go against The liability and the also the principal to be recorded in my equipment payment account in my operating expenses. And then record my interest also in the loan interest account on the profit and loss side. I hope you can understand my question. Thanks
search the forum - this has been discussed multiple times
That is not correct accounting. With a properly designed chart of accounts, you will not have an “equipment payment account.” The payment transaction you are recording credits the amount coming out of your bank account and debits the loan liability account and the interest expense account. You are not purchasing the equipment with this transaction. You are partially paying off the loan.
Recording the expense of purchasing the equipment occurred previously (or should have). It would have credited the bank account and debited either a fixed asset account for the equipment (if it was of a value and durability to be capitalized) or a current equipment expense account. It would also have been a payment transaction.
The proceeds for the loan should have been recorded as a receipt. That receipt would have debited your bank account and credited the loan liability account.
I recommend spending some time at one of the many online accounting tutorial sites. You might begin here: https://www.accountingcoach.com/.
Thank you for your help. I had began to wonder if that was incorrect. I have spent quite a bit of time on accounting coach but obviously not enough time. I will try to get that all corrected. Thanks again