In Quickbooks you can set up and enter transactions for the purchase of a new car financed by Chattel Mortgage and handle all the things like trade in, stamp duty etc.
Here are the transaction details sent by a client:
New Car Ex GST $30767
3rd Party Ins $449.77
Stamp Duty $1017
Therefore Car Total INC GST $36000
I made an initial $500 deposit to Car Dealer
I received 3500 Trade-in
I paid an additional Limp sum of $7000 to the car dealer
I then financed $25000 via chattel mortgage
with the repayments of $520pm for 60months.
Chattel Mortgages and the like are always a little complicated. As its a chattel mortgage you should be able to claim GST upfront even if you are on cash reporting. I’ve done an example below –
1. Bring to account asset and liability:
DR MV – Asset $30,767 GST code $3,076
DR MV – Asset $1,017 GST Free
CR Chattel Mortgage Liability $34,860
2. Bring to account expense associated with purchase;
DR – Rego Expense $639 (GST Free)
DR – Insurance $449.77 (I would have thought this had GST on it)
CR – Chattel Mortgage Liability $1,088.77
Your explanation doesn’t quite make up the $36,000 that you are referring to but only 35,948.77
3. Apply initial deposit of $500
DR – Chattel Mortgage Liability $500 (No GST should be NRT code)
CR – Cash at Bank $500
4. Apply Trade In
I’ve assumed your old car was also in Quickbooks and therefore the trade in would actually be proceeds on sale of the old vehicle.
– DR Chattel Mortgage Liability $3,500
– CR Sale of Assets $3,500 (check this may have GST included)
5. Additional Lump Sum
– DR Chattel Mortgage $7,000 (no GST)
– CR Cash at Bank $7,000 (no GST)
This leaves you with a liability of $24,948.77.
6. Monthly Repayments
The difference between your total monthly repayments and the liability is the interest you are charged. I would suggest you talk to your accountant to work out a schedule on how you should apply the interest. If your handy with excel you might be able to do it yourself.
– DR Chattel Mortgage (Principle Repaid)
– DR Interest Paid
– CR Cash at Bank