How to Record the Purchase of an Asset With a Note Payable
- 1). Write the date of the purchase transaction in the date column on the first line of a new journal entry in your accounting journal. For example, if you bought the asset on November 1, write "11/1" in the date column.
- 2). Write the type of asset you purchased in the account description column on the first line of the journal entry in your accounting journal. Write the amount of the purchase in the debit column on the same line. This increases that type of asset account by the amount of the purchase. For example, if you purchased machinery for $5,000, write "Machinery" in the account description column, and write "$5,000" in the debit column.
- 3). Write "Notes Payable" with an indent in the account description column on the second line of the same journal entry. Write the same amount of the purchase in the credit column on the same line. This increases the notes payable account by the amount of the purchase. In this example, write "Notes Payable" in the account description column, and write "$5,000" in the credit column.
- 4). Write a description of the transaction in the account description column on the third line of the journal entry. In this example, write "Purchase machinery with note payable."