When posting a new 'Long Term Liability' purchase (such as a vehicle)
what would be the typical balancing account? Is it a Fixed Asset
account or is that only for fully paid assets that have no more moniew
owing?

Howdy par174-ga,

You have it figured right in that the balancing entry for a long-term
liability such as a vehicle wherein payments are being made is a fixed
asset account.

This document, titled "CENTRAL OKANAGAN BUSINESS PLANNING AND RESOURCE
GUIDE" as presented on the Community Futures Development Corporation of
the Central Okanagan web site, states just that.

"A guide for small business start-ups in the Central Okanagan"
http://www.cfdcco.bc.ca/resourceguide/RESGUIDE.rtf

"If you decided you need a vehicle and so you secured a 5 year bank loan
and purchased a $5,000.00 vehicle, the vehicle would be recorded as a Fixed
Asset and the loan would be a Long-Term Liability."

Although the next reference deals with an entry in QuickBooks, it is still
the same process.  The following is from the QuickBooks Community web site.
http://www.quickbooksgroup.com/webx/.eeb8ae2

"You need to set up a Fixed Asset type account called Vehicles for the actual
cost of the vehicle and a Long Term Liability account for the loan to finance
the purchase. You make a journal entry to Debit the Fixed Asset account and
Credit the Note Payable for the loan.

Payments are amortized and split between the Loan Principal and Interest
Expense each month."

If you need any clarification, please free to ask.


Search strategy:

Google search on: loan "fixed asset" "long term liability" vehicle
://www.google.com/search?q=loan+%22fixed+asset%22+%22long+term+liability%22+vehicle

Looking Forward, denco-ga - Google Answers Researcher

SUPER!!
Answer was very helpful with extra detail and references that were
very much appreciated...Thanks!!!

My pleasure, par174-ga, and I greatly appreciate the kind comments, five
star rating and generous tip.

Looking Forward, denco-ga - Google Answers Researcher