To record depreciation of assets, go to Journals on Mclowd’s Settings Menu.
Click the ADD NEW JOURNAL ENTRY button.
Mclowd’s Chart of Accounts provides three Depreciation Expense Accounts:
and three Depreciation Investment Accounts:
To correctly record asset depreciation, your journal entry should debit the relevant expense account (creating a tax deductible expense) and credit the relevant investment account (reducing the value of the asset).
For example, to depreciate a building showing an asset value of $325,000 by 5%, create a journal entry as follows:
Your accounts will show a $16,250 expense and a new asset value of $308,750.
To record depreciation of fixtures and fittings, create a journal as follows:
debiting 5-1070-05 and crediting 1-1170-05.
Similarly, to depreciate plant and machinery, create a journal entry debiting account 5-1070-05 and crediting 1-1170-06.