How do I set up a Car Loan account and how do I process interest and repayments to appear on BAS?

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I have been entering Car Loan Repayments and Tax Payments (BAS) as expenses and therefore they appear on the Profit and Loss Statement. I want to fix this and set up new Accounts for them in my Chart of Accounts and enter them in correctly so they appear on my Balance Sheet. What accounts do I set up and need for these 2 items and can you advise me how to enter them so that I ensure it is correct. My Accountant has been fixing figures at his end but I want to fix up my Books so that everything is as it should be. Thanks.
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Nicole

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Posted 6 years ago

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John G, Information Support Analyst

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Hi Nicole,

Welcome to the Reckon Community.

Your Accountant will be the best person to ask for specific account information.

Generally, you should have a Car Loan Account (long-term liability) and a Car Loan Interest account (Expense).  If there are other expenses involved with the car loan you should have separate accounts for them too. 

When interest is charged, use Write Cheque with the Payee the Loan Provider and the account, your Car Loan Interest account.  Add the appropriate Tax Code to the Interest (it'll be either non-capital acquisition (NCG) or non-capital GST Free (NCF) - check with your Accountant).  

When you make a repayment on the loan you can use Write Cheque with the Payee as the Loan Provider and charged to the Car Loan Account. 


Hop this helps.

regards,
John


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Kevin V. Russell, Accredited Partner

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John mate there is no gst on loan interest. Never has been.