Quickbooks Accounting Question

[Bethany Crawford]

I have another accounting question for you all!  If I buy a new rental property and use money from my checking account for the down payment, how should I classify that transaction in Quickbooks?  Should that cash expense be consider a "fixed asset"?  Is there anything else I need to do in order to establish this property as an asset in my books? Thanks in advance! 

[Greg Scott]

I'm not a CPA, but have done a lot of SF bookkeeping.

To buy a property, you typically have down payment + loan to buy the property.  Therefore, the balance sheet impact from that, simplistically, would look like this:

Assets

• Property (Which is divided into two pieces)
  • Land
  • Improvements

Liability & Equity

• Liabilities
  • Mortgage on the property

• Equity
  • Paid in Capital - Money you contributed for the down payment