How do I handle down payment?

[Tod]

Client ordered large piece of farm equipment and paid $5,000 down in 2021 but due to supply problems, it won't be delivered until 2022 at which time client will pay remainder of purchase price.  How do I handle the down payment on 2021 return?

[abctax55 · Accepted solution]

1040 - nowhere (unless you want to put it somewhere just to track it...)

Entity return = deposit.  As an asset.