Expert: Mike Wellman - 12/27/2007

Question
Hello;
I am new to the bookkeeping scene and my husband opened his own business and I am doing the book work for him.  I have Quickbooks Pro 2008, and I am good with all that but I have a question on how to properly reimburse/pay expense.  For example...my husband uses his truck for business only....but it is in his name(personally) and the loan payment is deducted from his personal checking account.  Is there a way to have this paid from the Business Checking since it is strictly for business?

Answer
You can do that but it is not necessary. You can simply use the standard mileage rate for all miles driven as a deduction on your Schedule C and then take the interest expense paid on the loan on the tax return also. If you do not do the tax return then just provide the preparer with the interest paid statement and the mileage driven for business.

If you want to make accounting entries to get the vehicle on the books there are a number to make. You have to record the vehicle as an asset and set up the Note Payable. When a payment is made, debit interest expense and notes payable and credit cash.