Capital Assets and Tax Prep

Genivar

I've not done bookkeeping in about 15 years so I'm rusty.
I entered all of our transactions for our tax preparer but purchases made on capital assets (paid by loan) don't show up in our purchases. Did I just categorize things incorrectly??
i.e. Industrial Dryer CR Loan Acct DR Capital Assets
Where did I go wrong? If correct, do you do a second transaction for amortization
CR Capital Assets DR Amortization Exp?
How do I know how much to amortize each year?
There's salvage value that is almost the equivalent of the purchase price as we bought them second hand. Does this effect the amortization?

Thanks so much!

JulianP

Hey there @Genivar !

For every asset you own in Wave, you will need to create a new account on your Chart of Accounts page. This can be for each specific asset or asset type. To record the purchase of capital assets in Wave, you have three options depending on if you have a Wave Bill, if you purchased the asset with a bank or credit card account, or if you purchased the asset personally and are transferring it to your business. We have a great Help Center article you can check out here on how to record each case: Capital assets in Wave

If you want to record the depreciation of your capital assets over time in Wave, you will need to create a new account under the Depreciation & Amortization subcategory. You can name the new account something along the lines of "Accumulated Depreciation". Once this is done, you will need to create a journal entry to record the depreciation. For a great guide on this process, check out this Help Center article: Depreciation in Wave

Typically depreciation is determined based on the period of time you own a capital asset, or over its expected useful life. To help you determine the depreciation rate of your particular capital assets, I suggest reaching out to a professional CPA to make sure you get the most accurate accounting advice for your case. I hope this helps!