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May 20, 2020
Question

How to sell and remove a sold asset from the asset register.

  • May 20, 2020
  • 1 reply
  • 0 views

Hello!  I have researched for hours how to sell an asset and remove from register.  I am being told to create a journal entry to do so.  I create the journal entry just as instructed which in turn made my asset not have a zero balance.  I think I figured out that i then go to the cash account and transfer those funds to the asset account and that zeroed the account again, BUT the asset still remained in the asset register.  

 

How do I correctly do this so the asset register reflects actual assets??

 

Thanks you!!

1 reply

john-pero
Level 12
May 20, 2020

I do not know if you made a profit or sold for less than value on books. Or if you booked depreciation and the asset on the books is less than when you started.

 

When you purchased you would have credited checking and debited the asset. Your sales receipt for selling should have reduced the asset value by that much.  The journal entry is to clear it and account for any adjustment to profit 

 

A quick example. You bought an asset for $5k and  it for $3k. After the sales receipt asset is reduced to $2k.

 

Journal entry credit asset $2k, debit income $2k which is contra income and reflects loss. Tricky part is accounting for depreciation already raken and which may have to be recovered.  If it was fully depreciated the additions to the journal entry are debit  accumulated depreciation and credit income 5k each. Following at home, asset should be zero, accumulated deprdciation reduced by 5k. Income increased by 3k