Accounting Savvy for Business Owners: A Guide to the Bare Essentials by Philip B. Goodman CPA

Author:Philip B. Goodman CPA
Language: eng
Format: mobi, epub, pdf
Tags: Accounting, Small business, Financial, Business & Economics, General
ISBN: 9781932925180
Publisher: CPA911 PUBLISHING
Published: 2010-04-01T02:38:12.468000+00:00

Chapter 6 • Managing Liabilities

posted to the fixed asset to make sure the total cost of the asset is recorded. Check with your accountant to see how he or she wants you to create multiple transactions for the new asset.

Making Loan Payments

Loans are liabilities, but the interest you pay is a deductible business expense. As you make loan payments you need to separate the amount applied to principal from the amount applied to interest.

Some loans have fixed amounts for principal and interest on the outstanding balance each month; other loans are set up to pay a constant amount that is less interest and more principal with each payment. For the latter, you need to get an amortization schedule from the lender so you know how to split each payment.

Whether you write a check or have your loan payment automatically deducted from your bank account, here are the guidelines for creating the payment:

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