@Dicey545
To record this properly, there are a couple of pieces of information that are still needed:
1) The original purchase price of the trade-in vehicle.
2) How much depreciation was taken on the trade-in vehicle?
We need to know the original purchase price of the trade-in to remove it from your balance sheet, and we also need to know the amount of depreciation taken to determine if there was a gain or loss on the trade-in from a tax perspective.
Until we know those pieces of information, you can't make a complete entry. To enter this, you will create a journal entry (Company > Make General Journal Entries) like this:
| | Debit | Credit |
| Truck (Fixed Asset) | 98,828.09 | |
| Accumulated Depreciation | XXX | |
| Loan Payable (Liability) | | 50,533.99 |
| Trade-in Vehicle (to remove Fixed Asset @ original cost) | | XXX |
| Gain/Loss (other income) to balance (debit if loss, credit if gain) | | |
The taxes and fees are added to the truck's cost and capitalized as an asset (96,453.99 + 2,374.10 = 98,828.09).
Debits need to equal credits on a journal entry and the Gain/Loss (other income) is the balancing debit or credit. You will need to set up a 'Gain/Loss on Asset Disposal' other income account. Hope this helps.
If you can't determine the accumulated depreciation taken, you can make the following journal entry and let the business's CPA/tax accountant finish the entry:
| | Debit | Credit |
| Truck (Fixed Asset) | 98,828.09 | |
| Loan Payable (liability) | | 50,533.99 |
| Trade-in Vehicle (to remove Fixed Asset @ original cost) | | XXX |
| Ask My Accountant (to balance) | XXX | |
