When a plant asset is purchased for cash, its acquisition cost is simply the agreed on cash price. When you first purchase new equipment, you need to debit the specific equipment (ie, asset) account.And, credit the account you pay for the asset from. Accounting Policy Summary: Capital assets, in general, should be accounted for in accordance with generally accepted accounting principles (GAAP). This section provides guidance on accounting and reporting of Capital Assets in the institution's general ledger and the Annual Financial Report (AFR). Open the Fixed Asset Item List. Entry. This is an accounting rule that must always hold true. This lesson will cover how to create journal entries from business transactions. Journal entries are the way we capture the activity of our business. Figure PPE 21 compares asset acquisitions and business combinations.