I will be using some of my personal assets, Desktop Computer, 2 x Printers, Vehicle and Tools for the business an will have to take them on as fixed assets. I know I have to DT the asset account under assets, but what do I credit. possibly the Expense account?
In other words: -
Dt Fixed Assets - Computer Equipment under Assets
Ct Fixed Assets under Expenses
Or do we use the Fixed Asset Tab?
Any suggestions
You may credit your owner’s equity or capital account.
Dt: Fixed Asset
Ct: Equity/capital Account
Thanks @ Abeiku.
Why not use the Fixed Asset Tab?
Create a fixed asset under Fixed asset tab and do a journal entry like the following
It exactly what I am saying
My friend, @Abeiku, is exactly correct, @Kobus. Converting personal assets to business use is exactly like contributing capital and subsequently buying the assets from the company’s funds. The investment is reflected in the Profit & Loss Statement through claiming of periodic depreciation expense.
However, what is legally allowed as depreciation varies from jurisdiction to jurisdiction, especially when previously owned assets are involved. Check carefully about your local tax laws to determine (a) the total value you can claim for the converted assets, as you may have to reduce it for prior depreciation, even though you were not able to claim this depreciation as a tax deduction, (b) the amount of depreciation you can take in any accounting period, based on the category of asset, and (c) the time span over which the depreciation can be claimed. Remember that some tax authorities use depreciation rules to implement or encourage desired economic and social policies. And rules may be different, depending on the size and organization of your company. A consulting fee paid to an accountant may be a wise thing.
I will do thank you