Problem: How to enter a purchase of fixed assets on bank credit
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transfer?
Solution:Use a Loan Adjustment document with the transaction type Conversion of Accounts Payable to Loan Received.
An entity uses funds received as a loan to pay off its outstanding debt to a supplier by bank credit. This is typically formalized through a specific transaction type called Conversion of Accounts Payable to Loan Received.
1. Enter the Invoice Received from the Vehicle Supplier
- Go to Purchasing > Purchasing Documents > Invoices Received. Create a new document.
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See also: 4.2.3.1. Invoices Received (Receipt From Supplier) - FirstBit User Guide - FirstBit User Guide
2. Record the Asset in Fixed Assets
- Go to Accounting > Fixed Assets and create a new asset entry for the vehicle.
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See also: 12.2.1. Fixed Asset Entries - FirstBit User Guide - FirstBit User Guide
3. Create a loan agreement
- Enable Loan Agreements: Make sure the "Enable Long-Term Credits and Loans" option is selected in Administration > Settings > General Settings.
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See also: 6.6.1. Loan Agreements - FirstBit User Guide - FirstBit User Guide
4. Create a Loan Adjustment document with the transaction type Conversion of Accounts Payable to Loan Received.
- Go to Accounting, in the Service tools section select Loan Adjustment. Create a Loan Adjustment document with Transaction Type: Converstion of Accounts Payable to Loan Received.
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5. During month-end closing, interest on the loan will be calculated and posted automatically if set up correctly.
- Include the interest calculation in month-end closing procedures by selecting the Calculate Monthly Interest on Loans option on the form of the assistant.
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- In the document Processing of Current loans a monthly interest from the Loan Agreement and the Bank’s repayment schedules must be entered
6. Pay for the loan by creating a document Bank receipt with the type of Loan Payment transaction:
- On the main tab select Payment of Loans in Cash Flow Item. Also specify Repayment of Loan Received as Transaction Type
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