When a company purchases equipment, the accountant needs to record the transaction in the fixed assets account. This is because equipment is regarded as a long-term asset of the company, not a short-term expenditure. Therefore, we can use the following accounting entries to reflect this transaction:
Debit of fixed assets account
Bank/Accounts Payable Creditor
This entry shows that the company paid a sum of money from the bank or owed a sum of money to the supplier to buy new equipment.
Since the purchase of equipment may involve transportation and installation costs, these costs also need to be recorded in the relevant accounts. We can use the following entries to record these expenses:
Debit of transportation expense account
Debit of installation fee account
Bank/Accounts Payable Creditor
This entry indicates that the company paid the related expenses for transporting and installing the equipment to the target location.
After purchasing the equipment, the company also needs to consider depreciation. Depreciation refers to the decrease in the value of long-term assets in the process of use. According to the depreciation rules, the company usually accrues depreciation expenses according to a certain proportion in a certain period of time and records them in the depreciation expense account. We can use the following entries to record depreciation expenses:
Debit of depreciation expense account
Accumulated depreciation account credit
The accounting entry shows that the company has accrued a certain depreciation expense and credited it to the relevant account.
Accounting entries for purchasing equipment for capital construction projects include entries for recording transactions in fixed assets accounts, entries for recording transportation and installation costs, and entries for accruing depreciation expenses. This can accurately reflect the company's financial situation and changes in asset value. I hope this information is helpful to you!