How do I account for a lump sum money from the company we do contract work for? It’s damages to vehicle. The vehicle will not be repaired

We received a lump sum payment from company we do contract work for. It is for major damages to a vehicle. We will not be repairing or replacing the vehicle. And also selling for parts the remainder of what is left of the vehicle. We will be using the money to pay what is owing on the vehicle. How do I record this 

Hi, 

I am deligted to have you here.

Can you give me more information about the situation in the question ?

Regards,

We are self employed trucking company and have a contract to haul goods for a company. The truck was damaged as fault of the company we haul for. They paid us a lump sum amount for damages for the truck. We will not be fixing the truck and will be selling what’s left of the truck. How do I record the payment the company paid us. And is that now considered income?  We will be using the settlement to pay off money owing on the truck plus toward a down payment on another truck 

Hi kylarowsell,

Sorry to hear about the truck. Having equipment damaged to that point is never any good for a business. Making sure you have the settlement entered in your QuickBooks to keep track of balances is key when keeping your books accurate. I'd be happy to point you in the right direction.

There are many things that need to be entered into your books to track this, such as removing the truck as an asset and the payments for what was owed on it. For this reason it's best to reach out to your accountant to make sure all the appropriate accounts are adjusted as they are trained on how to do this. If you don't have an accountant no need to worry, we can help. You can go to: My Accountant>Find a pro to help to find an accountant in your area.

If you have any questions please feel free to reach out and let us know. We'd be happy to help.