Here is a simpler and more clear solution, lets pretend you purchased a Honda CRV for $15,000 with a 2k down payment
Step 1: Add the Vehicle as a Fixed Asset
Go to the Chart of Accounts:
Create a Fixed Asset Account:
From the Account Type dropdown, select "Fixed Assets."
For the Detail Type, select "Vehicles."
Name the account "Honda CRV."
Click "Save and Close."
Step 2: Record the Down Payment
Create a Journal Entry:
Go to the + New icon.
Select "Journal Entry."
Enter the Down Payment:
Date: Enter the date of the purchase.
Account: Select the "Honda CRV" fixed asset account.
Debit: Enter $2,000 (the amount of the down payment).
Account: Select "Business Checking." or whatever account it came from
Credit: Enter $2,000 for the business checking line.
Click "Save and Close."
Step 3: Record the Loan
Create a Long-Term Liability Account:
Go to the Chart of Accounts.
Click on "New."
From the Account Type dropdown, select "Long Term Liabilities."
For the Detail Type, select "Notes Payable."
Name the account "Honda CRV Loan."
Click "Save and Close."
Create a Journal Entry for the Loan:
Go to the + New icon.
Select "Journal Entry."
Date: Enter the date of the purchase.
Account: Select the "Honda CRV" fixed asset account.
Debit: Enter $13,000 (the financed amount).
Account: Select "Honda CRV Loan."
Credit: Enter $13,000.
Click "Save and Close."
Step 4: Record Monthly Loan Payments
Create a Recurring Expense:
Go to the + New icon.
Select "Expense."
Payee: Enter the name of the lender.
Payment Account: Select "Business Checking."
Date: Enter the date of the first loan payment.
Amount: Enter Loan Payment Amount $400 for example
Category: Select "Honda CRV Loan" for the principal portion and "Interest Expense" for the interest portion.
Click "Make Recurring" and set the frequency to Monthly.... if its monthly
Click "Save and Close."
