When the equipment has been installed and delivered for use, the accounting entries need to be recorded in accordance with the following steps:
In the initial investment stage of the asset, debit the "fixed assets" account, reflecting the cost value of the equipment; at the same time, credit the "construction-in-progress" account, indicating that the cost of the transfer from the construction project in progress.
In the "construction in progress" account, when it comes to outsourcing the installation, it will be debited to "construction in progress - in the installation of equipment", credited to "project materials", that is, the installation costs paid. If the use of self-supporting method, the use of construction materials or raw materials, will be debited to "construction in progress", credit "construction materials" or "raw materials", and may involve the carry forward of cost differences.
Non-construction costs such as employee compensation, administrative expenses and taxes related to construction in progress will be debited to "construction in progress - amortized expenditures" and credited to "employee compensation payable" or "bank deposits", etc. Losses caused by natural disasters will be deducted from the amount of compensation. Losses caused by natural disasters, net loss after deducting compensation, debit "construction in progress - amortized expenditures", credit "construction in progress - construction or installation works", the total scrapped will be credited to the "non-operating expenditures - extraordinary losses".
Project materials loss, scrap or damage, will also affect the "construction in progress - amortized expenditures", and adjust the "project materials" account. The expenses during the trial period and the proceeds of product sales are debited or credited to "construction in progress - amortized expenditures" respectively.
The above accounting entries follow accounting standards and ensure that fixed asset acquisitions and project costs are accurately recorded. Once these steps are completed, the equipment is officially listed as a fixed asset in the business's asset accounts.