# I bought equipment (or a truck) with a loan and a down payment — how do I record the purchase so the books show both the asset and what I still owe?

- **[United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg) · Businesses acquiring fixed assets]** A fixed asset should initially be recorded at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use; the costs listed as included are physical construction, demolition of preexisting structures, freight charges, sales taxes, installation fees and testing fees (an open list introduced by “include”). → [CG-MCE-078#S01](#s-CG-MCE-078-S01)
- **[United States (federal income tax) · Taxpayers who buy property · U.S. federal income tax (basis of property)]** The basis of property a taxpayer buys is usually its cost, and that cost is the amount paid in cash, debt obligations, other property or services. → [CG-MCE-078#S04](#s-CG-MCE-078-S04)
- **[United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg) · Businesses acquiring a fixed asset on credit]** Where the asset is purchased on credit, the initial entry debits the applicable fixed asset account for the cost of the asset and credits accounts payable — that is, the asset goes in at its cost with an offsetting liability. → [CG-MCE-078#S02](#s-CG-MCE-078-S02)
- **[United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147) · Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note]** In return for the Loan, the Borrower promises to pay to the order of the Lender the dollar amount entered in the Note, interest on the unpaid principal balance, and all other amounts required by the Note. → [CG-MCE-078#S25](#s-CG-MCE-078-S25)

## What this page establishes

- Why the asset goes on the books at its full cost, not at the amount financed — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation, primary regulator or government.)
- The basis for splitting acquisition costs between the asset and the period — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, primary regulator or government.)
- How the recorded obligation is made to match what is actually owed — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: primary regulator or government.)
- What the financing paperwork records, and what the lender's balance comprises — Not established
- What the asset record and the loan record each carry forward — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- What the purchase entry actually records: the asset, the loan and the cash you paid — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation, primary regulator or government.)
- Which purchase costs go into the asset's cost, and which are charged to the period — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, primary regulator or government.)
- Fees, taxes and an old balance rolled into the financing — Not established
- A deposit or down payment you already paid and recorded earlier — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Which document gives you each figure the entry needs — Not established
- The records to set up once the entry is posted — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Checking the posted entry back against the loan and purchase documents — Not established

## What the purchase entry actually records: the asset, the loan and the cash you paid
<a id="need-CG-MCE-078-P1"></a>

- <a id="s-CG-MCE-078-S01"></a>A fixed asset should initially be recorded at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use; the costs listed as included are physical construction, demolition of preexisting structures, freight charges, sales taxes, installation fees and testing fees (an open list introduced by “include”). _(jurisdiction: United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg), entity_scope: Businesses acquiring fixed assets)_ `CG-MCE-078#S01`
  > “You should initially record a fixed asset at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use. These costs include the physical construction of the asset, the demolition of any preexisting structures, freight charges, sales taxes, installation fees, and testing fees.” — [AccountingTools, Inc. (Steven Bragg) — Fixed Asset Accounting Explained](https://www.accountingtools.com/articles/fixed-asset-accounting.html), 2026-03-13; Section “Step 1: Accounting for the Initial Acquisition of a Fixed Asset”, first paragraph. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S02"></a>Where the asset is purchased on credit, the initial entry debits the applicable fixed asset account for the cost of the asset and credits accounts payable — that is, the asset goes in at its cost with an offsetting liability. _(jurisdiction: United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg), entity_scope: Businesses acquiring a fixed asset on credit, conditions: stated on the assumption that the asset was purchased on credit)_ `CG-MCE-078#S02`
  > “On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset.” — [AccountingTools, Inc. (Steven Bragg) — Fixed Asset Accounting Explained](https://www.accountingtools.com/articles/fixed-asset-accounting.html), 2026-03-13; Section “Step 1: Accounting for the Initial Acquisition of a Fixed Asset”, second paragraph. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S03"></a>Capitalization is defined as recording a long-term asset on the balance sheet and expensing its allocated costs on the income statement over the asset’s economic life. _(jurisdiction: United States, entity_scope: Businesses that purchase long-term assets, accounting_basis: US GAAP, as described in an introductory financial accounting textbook)_ `CG-MCE-078#S03`
  > “Capitalization is the process by which a long-term asset is recorded on the balance sheet and its allocated costs are expensed on the income statement over the asset’s economic life.” — [OpenStax, Rice University — Principles of Accounting, Volume 1: Financial Accounting - 11.2 Analyze and Classify Capitalized Costs versus Expenses](https://openstax.org/books/principles-financial-accounting/pages/11-2-analyze-and-classify-capitalized-costs-versus-expenses), 2026-04-23; Section 11.2 Analyze and Classify Capitalized Costs versus Expenses — opening paragraphs (text before the “Your Turn” box). Verified 2026-09-09.

- <a id="s-CG-MCE-078-S04"></a>The basis of property a taxpayer buys is usually its cost, and that cost is the amount paid in cash, debt obligations, other property or services. _(jurisdiction: United States (federal income tax), entity_scope: Taxpayers who buy property, accounting_basis: U.S. federal income tax (basis of property))_ `CG-MCE-078#S04`
  > “The basis of property you buy is usually its cost. The cost is the amount you pay in cash, debt obligations, other property, or services.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Cost Basis. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S05"></a>The entry increases (credits) the loan/liability account and increases (debits) the corresponding asset account, by the amount of the loan. _(jurisdiction: United States (QuickBooks Online United States edition; article served on the en-US QuickBooks support site), entity_scope: Businesses using QuickBooks Online that take a loan to purchase an asset, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced; QuickBooks Online Plus; QuickBooks Online Simple Start; QuickBooks Online Essentials; QuickBooks Ledger; Intuit Enterprise Suite; article updated 8/5/2026)_ `CG-MCE-078#S05`
  > “We increase or credit the loan/liability account and increase or debit the right asset account.” — [Intuit Inc. — Record a loan for an asset in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/business-assets/record-loan-asset/L499QJijT_US_en_US), 2026-08-05; Heading "Create a journal entry for the loan", explanatory paragraph following the steps. Verified 2026-09-09.

_Partly established. Established: the acquisition records an asset at its full cost (S01, S02); the acquisition records a liability for the amount financed (S05). Missing: the acquisition records the cash actually paid; the financed amount is not the asset's cost._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation, primary regulator or government._

## Why the asset goes on the books at its full cost, not at the amount financed
<a id="need-CG-MCE-078-C1"></a>

- See above: A fixed asset should initially be recorded at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use; the costs listed as included are physical construction, demolition of preexisting structures, freight charges, sales taxes, installation fees and testing fees (an open list introduced by “include”). ([CG-MCE-078#S01](#s-CG-MCE-078-S01))

- See above: Where the asset is purchased on credit, the initial entry debits the applicable fixed asset account for the cost of the asset and credits accounts payable — that is, the asset goes in at its cost with an offsetting liability. ([CG-MCE-078#S02](#s-CG-MCE-078-S02))

- <a id="s-CG-MCE-078-S06"></a>GAAP’s expense recognition (matching) principle states that expenses should be recorded in the same period as the revenues the expense helped create; this is given as the reason for allocating a long-lived asset’s cost over time. _(jurisdiction: United States, entity_scope: Companies reporting under US GAAP as described by the textbook, accounting_basis: US GAAP, as described in an introductory financial accounting textbook)_ `CG-MCE-078#S06`
  > “GAAP addressed this through the expense recognition ( matching ) principle, which states that expenses should be recorded in the same period with the revenues that the expense helped create.” — [OpenStax, Rice University — Principles of Accounting, Volume 1: Financial Accounting - 11.2 Analyze and Classify Capitalized Costs versus Expenses](https://openstax.org/books/principles-financial-accounting/pages/11-2-analyze-and-classify-capitalized-costs-versus-expenses), 2026-04-23; Section 11.2 Analyze and Classify Capitalized Costs versus Expenses — heading “Property, Plant, and Equipment (Fixed Assets)”. Verified 2026-09-09.

- See above: The basis of property a taxpayer buys is usually its cost, and that cost is the amount paid in cash, debt obligations, other property or services. ([CG-MCE-078#S04](#s-CG-MCE-078-S04))

- <a id="s-CG-MCE-078-S07"></a>When the prepaid item is eventually consumed, the document states that the buyer debits a relevant expense account and credits the prepaid expenses account — the later entry relieves the previously recorded prepaid asset rather than involving cash again. _(jurisdiction: United States (US-published general accounting guidance; the article itself names no jurisdiction), entity_scope: Buyer that has previously recorded a prepayment as a prepaid expense, conditions: Applies at the point the prepaid item is consumed)_ `CG-MCE-078#S07`
  > “When the prepaid item is eventually consumed, a relevant expense account is debited and the prepaid expenses account is credited.” — [AccountingTools, Inc. (Steven Bragg) — How to account for prepayments](https://www.accountingtools.com/articles/how-to-account-for-prepayments.html), 2026-05-11; Section "Accounting for Prepayments" > sub-heading "Buyer Perspective", second sentence (TEXT.txt line 87). Verified 2026-09-09.

- <a id="s-CG-MCE-078-S08"></a>These instructions cover only how to set up loans for assets; trade-in, down-payment, fees and taxes are described as items that are considered when assessing the original value of a purchase, and the article tells the reader to consult their accountant on how to account for those variables rather than stating the accounting treatment itself. _(jurisdiction: United States (QuickBooks Online United States edition; article served on the en-US QuickBooks support site), entity_scope: Businesses using QuickBooks Online that take a loan to purchase an asset, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced; QuickBooks Online Plus; QuickBooks Online Simple Start; QuickBooks Online Essentials; QuickBooks Ledger; Intuit Enterprise Suite; article updated 8/5/2026, conditions: Applies to the article's own instructions for setting up loans for assets)_ `CG-MCE-078#S08`
  > “Note: These instructions cover how to set up loans for assets. Trade-in, down-payment, fees, and taxes are considered when assessing the original value of a purchase. Consult your accountant on how to account for these variables.” — [Intuit Inc. — Record a loan for an asset in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/business-assets/record-loan-asset/L499QJijT_US_en_US), 2026-08-05; Article introduction, "Note:" paragraph (above the "Set up a liability account" heading). Verified 2026-09-09.

_Partly established. Established: an asset acquired with financing is recorded at its full cost (S01, S02); a corresponding liability is recorded (S02, S05). Missing: the cash payment is recorded; the accounting basis for that treatment; how a deposit or down payment already recorded before the purchase date is carried into the cash leg rather than recorded again._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation, primary regulator or government._

## Which purchase costs go into the asset's cost, and which are charged to the period
<a id="need-CG-MCE-078-P2"></a>

- See above: A fixed asset should initially be recorded at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use; the costs listed as included are physical construction, demolition of preexisting structures, freight charges, sales taxes, installation fees and testing fees (an open list introduced by “include”). ([CG-MCE-078#S01](#s-CG-MCE-078-S01))

- <a id="s-CG-MCE-078-S09"></a>The article says costs that are not necessary to bring the asset to the location and condition necessary for it to operate should not be assigned to a fixed asset. _(jurisdiction: United States (AccountingTools, Inc., a US CPE publisher whose site is scoped to US State CPE Requirements); the article itself names no jurisdiction or reporting framework, entity_scope: Entities holding, purchasing or constructing fixed assets; the article states no entity restriction)_ `CG-MCE-078#S09`
  > “Costs incurred that are not necessary to bring the asset to the location and condition necessary for it to operate” — [AccountingTools, Inc. (Steven Bragg) — Which costs to assign to a fixed asset](https://www.accountingtools.com/articles/which-costs-can-i-assign-to-a-fixed-asset.html), 2025-12-26; Section heading "Costs Not to Assign to a Fixed Asset" — bulleted list introduced by "The following costs should not be assigned to a fixed asset:" — list item 3 (TEXT.txt line 98). Verified 2026-09-09.

- <a id="s-CG-MCE-078-S10"></a>The article directs that the ongoing costs of servicing a fixed asset not be recognized as a fixed asset and instead be charged to expense as incurred, and says such servicing costs typically include maintenance labor, consumables and minor maintenance parts. _(jurisdiction: United States (AccountingTools, Inc., a US CPE publisher whose site is scoped to US State CPE Requirements); the article itself names no jurisdiction or reporting framework, entity_scope: Entities holding, purchasing or constructing fixed assets; the article states no entity restriction, conditions: Ongoing servicing costs of a fixed asset)_ `CG-MCE-078#S10`
  > “Do not recognize as a fixed asset the ongoing costs of servicing a fixed asset, which typically includes maintenance labor, consumables, and minor maintenance parts; these costs should instead be charged to expense as incurred.” — [AccountingTools, Inc. (Steven Bragg) — Which costs to assign to a fixed asset](https://www.accountingtools.com/articles/which-costs-can-i-assign-to-a-fixed-asset.html), 2025-12-26; Section "Costs Not to Assign to a Fixed Asset" — paragraph following the bulleted list (TEXT.txt line 104). Verified 2026-09-09.

- <a id="s-CG-MCE-078-S11"></a>The article lists interest costs among the costs to assign to a fixed asset, limited to interest incurred during the period required to bring the asset to the condition and location necessary for its intended use. _(jurisdiction: United States (AccountingTools, Inc., a US CPE publisher whose site is scoped to US State CPE Requirements); the article itself names no jurisdiction or reporting framework, entity_scope: Entities holding, purchasing or constructing fixed assets; the article states no entity restriction, conditions: Only interest incurred during the period required to bring the asset to the condition and location necessary for its intended use)_ `CG-MCE-078#S11`
  > “Interest costs incurred during the period required to bring an asset to the condition and location necessary for its intended use” — [AccountingTools, Inc. (Steven Bragg) — Which costs to assign to a fixed asset](https://www.accountingtools.com/articles/which-costs-can-i-assign-to-a-fixed-asset.html), 2025-12-26; Untitled opening section under the article title "Which costs to assign to a fixed asset" (dated December 26, 2025) — bulleted list introduced by "More specifically, assign the following costs to a fixed asset:" — list item 5 (TEXT.txt line 88). Verified 2026-09-09.

- <a id="s-CG-MCE-078-S12"></a>Cost for basis purposes also includes amounts the taxpayer pays for items such as sales tax, freight, installation and testing, excise taxes, legal and accounting fees when they must be capitalized, revenue stamps, recording fees and real estate taxes if assumed for the seller; the publication adds that certain other costs related to buying or producing the property may also have to be capitalized. _(jurisdiction: United States (federal income tax), entity_scope: Taxpayers who buy property, accounting_basis: U.S. federal income tax (basis of property), conditions: Legal and accounting fees are included only when they must be capitalized; Real estate taxes are included only if assumed for the seller; The publication lists these as items included; it does not state the list is exhaustive)_ `CG-MCE-078#S12`
  > “Your cost also includes amounts you pay for the following items.
 Sales tax.
 Freight.
 Installation and testing.
 Excise taxes.
 Legal and accounting fees (when they must be capitalized).
 Revenue stamps.
 Recording fees.
 Real estate taxes (if assumed for the seller).
You may also have to capitalize (add to basis) certain other costs related to buying or producing property.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Cost Basis. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S13"></a>Where an eligible trade-in is deducted, the Texas motor vehicle tax is computed on the remaining selling price of the purchased vehicle. _(jurisdiction: United States — Texas (Texas motor vehicle sales and use tax administered by the Texas Comptroller of Public Accounts), entity_scope: Purchasers and sellers (including dealers) in Texas motor vehicle sales transactions, conditions: an eligible trade-in has been deducted from the selling price)_ `CG-MCE-078#S13`
  > “The tax is computed on the remaining selling price for the purchased vehicle.” — [Texas Comptroller of Public Accounts — Trade-Ins — Motor Vehicle Tax Guide (Publication 96-254)](https://comptroller.texas.gov/taxes/publications/96-254/trade-ins.php), 2026-03; Motor Vehicle Tax Guide (Publication 96-254, 3/2026) > "Trade-Ins", opening untitled paragraphs. Verified 2026-09-09.

_Partly established. Established: which costs incurred to acquire the asset and bring it into service are included in its recorded cost (S01). Missing: which purchase-related costs are charged to the period._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, primary regulator or government._

## The basis for splitting acquisition costs between the asset and the period
<a id="need-CG-MCE-078-C2"></a>

- See above: A fixed asset should initially be recorded at the historical cost of acquiring it, which includes the costs to bring it to the condition and location necessary for its intended use; the costs listed as included are physical construction, demolition of preexisting structures, freight charges, sales taxes, installation fees and testing fees (an open list introduced by “include”). ([CG-MCE-078#S01](#s-CG-MCE-078-S01))

- See above: The article says costs that are not necessary to bring the asset to the location and condition necessary for it to operate should not be assigned to a fixed asset. ([CG-MCE-078#S09](#s-CG-MCE-078-S09))

- See above: The article directs that the ongoing costs of servicing a fixed asset not be recognized as a fixed asset and instead be charged to expense as incurred, and says such servicing costs typically include maintenance labor, consumables and minor maintenance parts. ([CG-MCE-078#S10](#s-CG-MCE-078-S10))

- See above: The article lists interest costs among the costs to assign to a fixed asset, limited to interest incurred during the period required to bring the asset to the condition and location necessary for its intended use. ([CG-MCE-078#S11](#s-CG-MCE-078-S11))

- See above: Cost for basis purposes also includes amounts the taxpayer pays for items such as sales tax, freight, installation and testing, excise taxes, legal and accounting fees when they must be capitalized, revenue stamps, recording fees and real estate taxes if assumed for the seller; the publication adds that certain other costs related to buying or producing the property may also have to be capitalized. ([CG-MCE-078#S12](#s-CG-MCE-078-S12))

- See above: Where an eligible trade-in is deducted, the Texas motor vehicle tax is computed on the remaining selling price of the purchased vehicle. ([CG-MCE-078#S13](#s-CG-MCE-078-S13))

_Partly established. Established: which costs incurred to acquire an asset and bring it into service are included in its recorded cost (S01). Missing: which purchase-related costs are charged to the period._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, primary regulator or government._

## Fees, taxes and an old balance rolled into the financing
<a id="need-CG-MCE-078-P3"></a>

- <a id="s-CG-MCE-078-S14"></a>Basis includes the settlement fees and closing costs of buying property but does not include the fees and costs of getting a loan on the property; a fee for buying the property is one that must be paid even if the property were bought for cash. _(jurisdiction: United States (federal income tax), entity_scope: Buyers of real property, accounting_basis: U.S. federal income tax (basis of property))_ `CG-MCE-078#S14`
  > “Your basis includes the settlement fees and closing costs for buying property. You can't include in your basis the fees and costs for getting a loan on property. A fee for buying property is a cost that must be paid even if you bought the property for cash.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Real Property > Settlement costs.. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S15"></a>Where the listed non-basis settlement costs relate to business property, items (1) through (3) of that list are deductible as business expenses, while items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan. _(jurisdiction: United States (federal income tax), entity_scope: Buyers of business real property, accounting_basis: U.S. federal income tax (basis of property), conditions: Applies to the numbered items in the preceding list of settlement fees and closing costs that cannot be included in basis)_ `CG-MCE-078#S15`
  > “If these costs relate to business property, items (1) through (3) are deductible as business expenses. Items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Real Property > Settlement costs.. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S16"></a>Where a buyer buys property and assumes, or buys subject to, an existing mortgage on it, basis includes the amount paid for the property plus the amount to be paid on the mortgage. _(jurisdiction: United States (federal income tax), entity_scope: Buyers of property who assume or take subject to an existing mortgage, accounting_basis: U.S. federal income tax (basis of property))_ `CG-MCE-078#S16`
  > “If you buy property and assume (or buy subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Real Property > Assumption of mortgage.. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S17"></a>Where property is bought on a time-payment plan charging little or no interest, the basis is generally the stated purchase price minus so much of that stated price as is treated as unstated interest or original issue discount, whichever applies. _(jurisdiction: United States (federal income tax), entity_scope: Taxpayers buying property on a time-payment plan charging little or no interest, accounting_basis: U.S. federal income tax (basis of property), conditions: Applies where the plan charges little or no interest)_ `CG-MCE-078#S17`
  > “If you buy property on a time-payment plan that charges little or no interest, the basis of your property is generally your stated purchase price, minus the amount of the stated purchase price considered to be unstated interest or original issue discount, whichever is applicable.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 551 (12/2025), Basis of Assets](https://www.irs.gov/publications/p551), 2025-12; Publication 551 - Main Contents > Cost Basis > Loans with low or no interest.. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S19"></a>The trade-in amount used for Texas motor vehicle tax is the value of the vehicle traded in, not the trade-in equity — so any amount still owed on the traded vehicle does not reduce the trade-in figure used. _(jurisdiction: United States — Texas (Texas motor vehicle sales and use tax administered by the Texas Comptroller of Public Accounts), entity_scope: Purchasers and sellers (including dealers) in Texas motor vehicle sales transactions)_ `CG-MCE-078#S19`
  > “The value of the motor vehicle trade-in is not the equity, but the value of the vehicle traded in.” — [Texas Comptroller of Public Accounts — Trade-Ins — Motor Vehicle Tax Guide (Publication 96-254)](https://comptroller.texas.gov/taxes/publications/96-254/trade-ins.php), 2026-03; Motor Vehicle Tax Guide (Publication 96-254, 3/2026) > "Trade-Ins", opening untitled paragraphs. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S20"></a>Among the general powers the Lender may exercise, it may incur expenses to collect amounts due under the Note, to enforce the Note or any other Loan Document, and to preserve or dispose of the Collateral; those expenses may include, among other things, payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs; and if the Lender incurs such expenses it may demand immediate repayment from the Borrower or add the expenses to the principal balance. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note, conditions: power exercisable without notice and without Borrower’s consent; the repayment-or-add-to-principal option arises only if Lender incurs such expenses; the listed expense types are given as examples (“among other things… may include”), not a closed list)_ `CG-MCE-078#S20`
  > “Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other
Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may
include payments for property taxes, prior liens, insurance, appraisals, environmental remediation
costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand
immediate repayment from Borrower or add the expenses to the principal balance;” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 6, LENDER’S GENERAL POWERS, item B (under the lead-in “Without notice and without Borrower’s consent, Lender may:”), on the page block ending in the printed footer “4 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

_Not established from an authoritative source._

## How the recorded obligation is made to match what is actually owed
<a id="need-CG-MCE-078-C3"></a>

- See above: Basis includes the settlement fees and closing costs of buying property but does not include the fees and costs of getting a loan on the property; a fee for buying the property is one that must be paid even if the property were bought for cash. ([CG-MCE-078#S14](#s-CG-MCE-078-S14))

- See above: Where the listed non-basis settlement costs relate to business property, items (1) through (3) of that list are deductible as business expenses, while items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan. ([CG-MCE-078#S15](#s-CG-MCE-078-S15))

- See above: Where a buyer buys property and assumes, or buys subject to, an existing mortgage on it, basis includes the amount paid for the property plus the amount to be paid on the mortgage. ([CG-MCE-078#S16](#s-CG-MCE-078-S16))

- See above: Where property is bought on a time-payment plan charging little or no interest, the basis is generally the stated purchase price minus so much of that stated price as is treated as unstated interest or original issue discount, whichever applies. ([CG-MCE-078#S17](#s-CG-MCE-078-S17))

- See above: The trade-in amount used for Texas motor vehicle tax is the value of the vehicle traded in, not the trade-in equity — so any amount still owed on the traded vehicle does not reduce the trade-in figure used. ([CG-MCE-078#S19](#s-CG-MCE-078-S19))

- See above: Among the general powers the Lender may exercise, it may incur expenses to collect amounts due under the Note, to enforce the Note or any other Loan Document, and to preserve or dispose of the Collateral; those expenses may include, among other things, payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs; and if the Lender incurs such expenses it may demand immediate repayment from the Borrower or add the expenses to the principal balance. ([CG-MCE-078#S20](#s-CG-MCE-078-S20))

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard. Highest achieved: primary regulator or government._

## A deposit or down payment you already paid and recorded earlier
<a id="need-CG-MCE-078-P4"></a>

- <a id="s-CG-MCE-078-S21"></a>The document defines a prepayment as a payment received by a selling company from a buyer before the seller has shipped the goods or provided the services. _(jurisdiction: United States (US-published general accounting guidance; the article itself names no jurisdiction), entity_scope: Buyer and seller in a transaction where the buyer pays before delivery of goods or performance of services)_ `CG-MCE-078#S21`
  > “A prepayment is made when a selling company receives payment from a buyer before the seller has shipped goods or provided services to the buyer.” — [AccountingTools, Inc. (Steven Bragg) — How to account for prepayments](https://www.accountingtools.com/articles/how-to-account-for-prepayments.html), 2026-05-11; Introductory paragraph, immediately under the title "How to account for prepayments" (TEXT.txt line 83). Verified 2026-09-09.

- See above: When the prepaid item is eventually consumed, the document states that the buyer debits a relevant expense account and credits the prepaid expenses account — the later entry relieves the previously recorded prepaid asset rather than involving cash again. ([CG-MCE-078#S07](#s-CG-MCE-078-S07))

- <a id="s-CG-MCE-078-S23"></a>The document states that prepayments do not immediately affect the income statement when paid, because they are initially recorded as assets, and that a portion is recognised as an expense on the income statement as the prepaid service or benefit is consumed over time. _(jurisdiction: United States (US-published general accounting guidance; the article itself names no jurisdiction), entity_scope: Party that has paid a prepayment and records it as an asset, conditions: Expense recognition occurs as the prepaid service or benefit is consumed over time)_ `CG-MCE-078#S23`
  > “Prepayments do not immediately affect the income statement when paid because they are initially recorded as assets. As the prepaid service or benefit is consumed over time, a portion is recognized as an expense on the income statement.” — [AccountingTools, Inc. (Steven Bragg) — How to account for prepayments](https://www.accountingtools.com/articles/how-to-account-for-prepayments.html), 2026-05-11; Section "Prepayment FAQs" > question "How do prepayments affect the income statement?" (TEXT.txt lines 96–97). Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._

## Which document gives you each figure the entry needs
<a id="need-CG-MCE-078-P5"></a>

- <a id="s-CG-MCE-078-S24"></a>The SBA standard loan note form carries, as header fields to be completed, the date, the loan amount, the interest rate and the borrower. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S24`
  > “Date
Loan Amount
Interest Rate
Borrower” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Form header fields, above section 1 (PROMISE TO PAY), on the page block ending in the printed footer “2 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S25"></a>In return for the Loan, the Borrower promises to pay to the order of the Lender the dollar amount entered in the Note, interest on the unpaid principal balance, and all other amounts required by the Note. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S25`
  > “In return for the Loan, Borrower promises to pay to the order of Lender the amount of
_______________________________________________________________________________________
Dollars, interest on the unpaid principal balance, and all other amounts required by this Note.” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 1, PROMISE TO PAY, on the page block ending in the printed footer “2 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S26"></a>In this Note, “Loan Documents” means the documents related to this loan signed by the Borrower, any Guarantor, or anyone who pledges collateral. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S26`
  > ““Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or
anyone who pledges collateral.” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 2, DEFINITIONS, definition of “Loan Documents”, on the page block ending in the printed footer “2 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S27"></a>The Borrower must make all payments at the place the Lender designates, and the payment terms for the loan are set out in this section of the Note. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S27`
  > “Borrower must make all payments at the place Lender designates. The payment terms for this Note are:” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 3, PAYMENT TERMS, on the page block ending in the printed footer “2 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S28"></a>As a recommended practice, supporting documentation — invoices, contracts, disposal records and appraisal reports — should be retained to support asset valuations and facilitate audits; the article names no retention period. _(jurisdiction: United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg), entity_scope: Organizations maintaining fixed asset records, conditions: presented as one of a number of enhancements that “can be made” to fixed asset recordkeeping (“Consider the following options”); no retention period stated)_ `CG-MCE-078#S28`
  > “Retain supporting documentation . Maintain invoices, contracts, disposal records, and appraisal reports to support asset valuations and facilitate audits.” — [AccountingTools, Inc. (Steven Bragg) — Fixed Asset Accounting Explained](https://www.accountingtools.com/articles/fixed-asset-accounting.html), 2026-03-13; Section “Fixed Asset Accounting Best Practices”, practice “Retain supporting documentation”. Verified 2026-09-09.

_Not established from an authoritative source._

## What the financing paperwork records, and what the lender's balance comprises
<a id="need-CG-MCE-078-C4"></a>

- See above: The SBA standard loan note form carries, as header fields to be completed, the date, the loan amount, the interest rate and the borrower. ([CG-MCE-078#S24](#s-CG-MCE-078-S24))

- See above: In return for the Loan, the Borrower promises to pay to the order of the Lender the dollar amount entered in the Note, interest on the unpaid principal balance, and all other amounts required by the Note. ([CG-MCE-078#S25](#s-CG-MCE-078-S25))

- See above: The Borrower must make all payments at the place the Lender designates, and the payment terms for the loan are set out in this section of the Note. ([CG-MCE-078#S27](#s-CG-MCE-078-S27))

- See above: Among the general powers the Lender may exercise, it may incur expenses to collect amounts due under the Note, to enforce the Note or any other Loan Document, and to preserve or dispose of the Collateral; those expenses may include, among other things, payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs; and if the Lender incurs such expenses it may demand immediate repayment from the Borrower or add the expenses to the principal balance. ([CG-MCE-078#S20](#s-CG-MCE-078-S20))

_Not established from an authoritative source._

## Checking the posted entry back against the loan and purchase documents
<a id="need-CG-MCE-078-P7"></a>

- See above: In return for the Loan, the Borrower promises to pay to the order of the Lender the dollar amount entered in the Note, interest on the unpaid principal balance, and all other amounts required by the Note. ([CG-MCE-078#S25](#s-CG-MCE-078-S25))

- See above: Among the general powers the Lender may exercise, it may incur expenses to collect amounts due under the Note, to enforce the Note or any other Loan Document, and to preserve or dispose of the Collateral; those expenses may include, among other things, payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs; and if the Lender incurs such expenses it may demand immediate repayment from the Borrower or add the expenses to the principal balance. ([CG-MCE-078#S20](#s-CG-MCE-078-S20))

- <a id="s-CG-MCE-078-S29"></a>The Borrower may not use an oral statement of the Lender or of SBA to contradict or alter the written terms of the Note. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S29`
  > “Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of
this Note.” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 9, GENERAL PROVISIONS, item E, on the page block ending in the printed footer “4 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S30"></a>By signing the Note, each individual or entity becomes obligated under the Note as Borrower. _(jurisdiction: United States (federal; SBA-guaranteed business loan evidenced by SBA Form 147), entity_scope: Borrower (and Operating Company where named) under a loan evidenced by SBA Form 147; Lender and SBA as defined in the Note)_ `CG-MCE-078#S30`
  > “By signing below, each individual or entity becomes obligated under this Note as Borrower.” — [U.S. Small Business Administration, Office of Capital Access — SBA Standard Loan Note (SBA Form 147)](https://legacy.sba.gov/sites/default/files/2020-08/040720note-508.pdf), 2020-11-01; Section 11, BORROWER’S NAME(S) AND SIGNATURE(S), on the page block ending in the printed footer “6 of 6 / SBA Form 147 (06/03/02) Version 4.1”. Verified 2026-09-09.

_Not established from an authoritative source._

## The records to set up once the entry is posted
<a id="need-CG-MCE-078-P6"></a>

- <a id="s-CG-MCE-078-S31"></a>The fixed asset register is a detailed listing of every fixed asset a business has acquired or built. _(jurisdiction: United States (US-based CPE publisher; the article itself names no jurisdiction), entity_scope: Businesses that acquire or build fixed assets)_ `CG-MCE-078#S31`
  > “The fixed asset register is a detailed listing of every fixed asset that has been acquired or built by a business.” — [AccountingTools, Inc. (Steven Bragg) — Fixed asset register definition](https://www.accountingtools.com/articles/what-is-a-fixed-asset-register), 2026-02-12; Section "What is a Fixed Asset Register?", first sentence. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S32"></a>The information in a fixed asset register typically includes, among other items, asset name, a unique asset identification number, asset cost, asset location, the responsible manager or department, asset class, useful life, salvage value, accumulated impairment charges, current carrying amount, accumulated depreciation for the asset, and the depreciation method used; the list is given as typical and is not stated to be complete. _(jurisdiction: United States (US-based CPE publisher; the article itself names no jurisdiction), entity_scope: Fixed asset registers maintained by businesses, conditions: listed as items typically included; the source does not present the list as exhaustive)_ `CG-MCE-078#S32`
  > “The information contained within this register typically includes the following items:
 Asset name
 Unique asset identification number
 Asset cost
 Asset location
 Responsible manager or department
 Asset class assigned to the asset
 Useful life assigned to the asset
 Salvage value assigned to the asset
 Accumulated impairment charges
 Current carrying amount 
 Accumulated depreciation associated with the asset
 Depreciation method used to depreciate the asset” — [AccountingTools, Inc. (Steven Bragg) — Fixed asset register definition](https://www.accountingtools.com/articles/what-is-a-fixed-asset-register), 2026-02-12; Section "What is a Fixed Asset Register?", lead-in sentence and the bulleted list that follows it. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S33"></a>An organization’s accounting records carry a separate account for each general type of fixed asset, and a newly acquired fixed asset is recorded in one of those accounts when it is recognised. _(jurisdiction: United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg), entity_scope: Organizations maintaining fixed asset accounting records)_ `CG-MCE-078#S33`
  > “In an organization’s accounting records, there is a separate account for each general type of fixed asset. When a newly-acquired fixed asset is recognized, it is stored in one of these accounts.” — [AccountingTools, Inc. (Steven Bragg) — Fixed Asset Accounting Explained](https://www.accountingtools.com/articles/fixed-asset-accounting.html), 2026-03-13; Section “Examples of Fixed Assets”, introductory paragraph. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S34"></a>Initial asset recordation is the initial entry of the cost of a newly acquired asset into the books of the organization. _(jurisdiction: United States (US GAAP-oriented general guidance from a US publisher; AccountingTools/Steven Bragg), entity_scope: Organizations acquiring fixed assets)_ `CG-MCE-078#S34`
  > “Initial asset recordation . This is the initial entry of the cost of a newly-acquired assets into the books of the organization.” — [AccountingTools, Inc. (Steven Bragg) — Fixed Asset Accounting Explained](https://www.accountingtools.com/articles/fixed-asset-accounting.html), 2026-03-13; Section “The Fixed Asset Life Cycle”, event “Initial asset recordation”. Verified 2026-09-09.

- <a id="s-CG-MCE-078-S35"></a>QuickBooks Online lets a user set up a liability account to record a loan and its payments; that account tracks what the user owes, and the deposit of the loan money into the user's bank account can also be recorded. _(jurisdiction: United States (en-US edition of the QuickBooks Online help article; amounts stated in US dollars and country selector set to United States), entity_scope: Businesses using QuickBooks Online, per the products the article lists itself as applying to, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite; article updated 8/5/2026)_ `CG-MCE-078#S35`
  > “You can set up a liability account in QuickBooks Online to record a loan and its payments. This account tracks what you owe. You can also record the deposit of that loan money into your bank account.” — [Intuit Inc. — Set up a loan in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/loans/set-loan-quickbooks-online/L7pMR6rUN_US_en_US), 2026-08-05; Body introduction, under the article title "Set up a loan in QuickBooks Online". Verified 2026-09-09.

_Partly established. Established: the asset record (S31, S33). Missing: the loan record; what each of those records carries forward._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._

## What the asset record and the loan record each carry forward
<a id="need-CG-MCE-078-C5"></a>

- See above: The fixed asset register is a detailed listing of every fixed asset a business has acquired or built. ([CG-MCE-078#S31](#s-CG-MCE-078-S31))

- See above: The information in a fixed asset register typically includes, among other items, asset name, a unique asset identification number, asset cost, asset location, the responsible manager or department, asset class, useful life, salvage value, accumulated impairment charges, current carrying amount, accumulated depreciation for the asset, and the depreciation method used; the list is given as typical and is not stated to be complete. ([CG-MCE-078#S32](#s-CG-MCE-078-S32))

- See above: An organization’s accounting records carry a separate account for each general type of fixed asset, and a newly acquired fixed asset is recorded in one of those accounts when it is recognised. ([CG-MCE-078#S33](#s-CG-MCE-078-S33))

- See above: Initial asset recordation is the initial entry of the cost of a newly acquired asset into the books of the organization. ([CG-MCE-078#S34](#s-CG-MCE-078-S34))

- See above: QuickBooks Online lets a user set up a liability account to record a loan and its payments; that account tracks what the user owes, and the deposit of the loan money into the user's bank account can also be recorded. ([CG-MCE-078#S35](#s-CG-MCE-078-S35))

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._

## Not yet fully established from an authoritative source

- Establish that an asset acquired with financing is recorded at its full cost with a corresponding liability and cash payment, and the accounting basis for that treatment, including how a deposit or down payment already recorded before the purchase date is carried into the cash leg rather than recorded again. _(partly established; below the required authority class)_
- Establish which costs incurred to acquire an asset and bring it into service are included in its recorded cost, and which purchase-related costs are charged to the period. _(partly established; below the required authority class)_
- Establish how amounts rolled into the financing, such as fees, taxes or a prior balance, are recorded relative to the asset and to the liability. _(not established; below the required authority class)_
- Establish which documents produced by a financed purchase carry the price, charges, financed amount and payment figures, and against what the posted entry is verified, including what the lender's opening balance comprises and what a difference between it and the recorded obligation indicates. _(not established)_
- Establish which records must exist after the acquisition for the asset and the obligation to be maintained, and what each record carries forward. _(not established; below the required authority class)_
- Establish that the acquisition records an asset at its full cost, a liability for the amount financed and the cash actually paid, and that the financed amount is not the asset's cost. _(partly established; below the required authority class)_
- Establish which costs incurred to acquire the asset and bring it into service are included in its recorded cost, and which purchase-related costs are charged to the period. _(partly established; below the required authority class)_
- Establish how the liability is recorded when amounts other than the purchase price are rolled into the financing, so the recorded obligation matches what is actually owed. _(not established)_
- Establish the treatment of a deposit or down payment made before the purchase date or in an earlier period, so it is not recorded twice or omitted from the cash leg. _(not established; below the required authority class)_
- Identify which purchase and financing documents carry each figure the entry needs, and how the posted entry is checked back against them. _(not established)_
- Establish what must exist after the entry is posted for the asset and the obligation to be maintained, naming the asset record and the loan record and what each carries forward. _(partly established; below the required authority class)_
- Require verification that the recorded liability agrees with the lender's opening balance and the recorded asset with the purchase document, and identify what a difference between them indicates. _(not established)_

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_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._