A Journal Entry Equipment Purchase is an accounting entry that records the purchase of equipment for use in a business. This type of transaction affects both the asset and liability side of the balance sheet. When an organization purchases an item of equipment, such as a vehicle or computer, they will record the purchase price, sales taxes, freight costs and other related expenses on their books, creating the journal entry. The journal entry will also reflect any payment terms associated with the purchase, such as whether it is paid in full at time of purchase or over a period of time. By tracking this entry, businesses can gain insight into their financial health and make informed decisions about future investments.