Recording Purchase Discount

[Abu_Hasan]

I just bought some equipment on credit.
Although I didn’t ask, my supplier gave me a discount on total invoice amount.

What would be the proper way to record this discount?

[Tut]

Fundamentally, the discount is just a reduction in price. But how you account depends on how you are treating the purchases. Allocate to some equipment expense account if treating as a current expense. Allocate to Fixed Assets and appropriate subaccount(s) if planning on depreciating the expense over time. Read the Guide below:

Purchasing fixed asset

To enter a fixed asset you purchased, firstly you need to create the fixed asset. Go to Fixed Assets tab. Click New Fixed Asset button. Enter details of the fixed asset. Click Create button. Once you create the fixed asset, you will notice the purchase cost is zero. This is because under double-entry accounting you cannot simply enter the purchase cost without entering the actual purchase or payment transaction. Purchase of the fixed asset can be recorded under following tabs: Cash Account…

If this will be lumped as a current expense, just enter the reduced amount of the purchase. If dividing up into separate fixed assets, prorate the discount among the individual items.