Purchased Computer Journal Entry

The company purchased the computer for internal use and it is classified as a fixed asset.

Fixed assets are the assets that company purchase for use only, not for sale. The definition of a fixed asset can vary from company to company, but usually includes long-term assets such as land, buildings, machinery, and computer equipment. These assets are not intended for resale, but rather for use in the production of goods or services. Because they are not easily converted to cash, fixed assets are often financed through long-term loans or lines of credit.

In addition to being used in the production process, fixed assets can also be leased to other businesses. Leasing is a popular option for companies that do not have the upfront capital to purchase their own fixed assets. Whether used internally or leased out to others, fixed assets play a vital role in the operation of many businesses.

Computers are an essential piece of equipment for any business. They can be used to support operations, manage customer information, and process transactions. When choosing a computer for your business, it is important to choose one that will meet your specific needs and have a long lifespan.

When selecting a business computer, pay careful attention to the processor speed, memory, and storage capacity. Also consider the software that comes pre-installed on the machine. Make sure that it is compatible with any other software that you use in your business. By taking the time to select the right computer for your business, you can ensure that it will provide years of reliable service.

The computer, that uses in the company, meets the definition of fixed assets. So it has to be recorded on the balance sheet as fixed assets.

Journal Entry for Computer Purchase

Purchasing a computer is the process that a company acquires fixed assets to use in the business process.

The company requires to record fixed assets when it is ready to use, the cost is measured reliable and the company is able to use the assets.

When the company purchases computer, the fixed assets are ready to use. The company has to record the computer when supplier delivers the items to the office. It must be classified as fixed assets on the balance sheet.

The journal entry of purchasing computers is debiting fixed assets and credit accounts payable.

The computer is classified as the fixed assets on balance sheet. And it also increases the accounts payable which is the company obligation to the supplier.

Example

Company ABC has purchased a set of computers which cost $ 15,000 on credit. The company will use the computers for internal use. They are not purchased for the purpose of reselling. Please prepare journal entry for purchasing computers.

The company purchases computers for internal use, so they are classified as fixed assets. The cost has to record on the balance sheet and depreciate over the estimated lifetime.

The journal entry of purchasing computers is debiting fixed assets $ 15,000 and credit accounts payable $ 15,000.