Does anyone know how to enter a part exchange when buying machinery from a dealer? do i make a journal entry?

Hi @micjrvs 

Really, you should raise an invoice for the item your 'selling' to the dealer then contra the p/x against their invoice.  Otherwise the asset is still on your books & your accountant will have to adjust at year end.

Receive their 'payment' into a dummy bank account = Contra.

Part pay their invoice using the balance in Contra.

Pay remainder from usual Bank Account in QBO.

Hope this helps.