Vehicle purchase + Loan + Interest

JNLJNL Member Posts: 4

Hi all

Newbie here with little account knowledge. I wanted to record a purchase of new vehicle and wanted to know how should I record this hypothetical scenario below

Purchase of vehicle $100,000
Bank Loan - $50,000
Bank Interest - $10,000
Loan term - 60 months
Repayment - $1000 monthly

Based on this post, I think i worked out

  1. Create an asset in Accounting > Chart of Accounts > Assets > Property, Plant, Equipment
  2. Create a new loan account under Accounting > Chart of Accounts > Liabilities & Credit Cards > Loan and Line of Credit called "Vehicle Loan"

How do we account for Interests mentioned above? what do I do for monthly bank loan deduction of $1000 (principal and interest).

Thanks!

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