@brendam24
You need to remove the truck from the balance sheet as well as close the loan payable. The info needed to make a complete entry are:
1) The original cost of the truck (the amount showing as a fixed asset on your balance sheet).
2) The amount of depreciation taken on the truck.
If you have no idea the amount of depreciation taken, make the following journal entry and let your accountant figure the depreciation and the resulting gain/loss from the disposal of the asset:
| | Debit | Credit |
| Bank Account | 19,000 | |
| Loan Payable (to close) | 47,000 | |
| Ask My Accountant | 14,000 | |
| Truck (Fixed Asset to close) | | 80,000 |
If you know the amount of depreciation taken, then you can make a complete entry. Let's take a truck that cost $80K and you took $20K in depreciation. The journal entry to remove the truck and loan from your balance sheet is below. You will most likely need to set up the Gain on Disposal of Asset - Other income account.
| | Debit | Credit |
| Bank Account | 19,000 | |
| Loan Payable (to close) | 47,000 | |
| Accumulated Depreciation | 20,000 | |
| Truck (Fixed Asset to close) | | 80,000 |
| Gain on Disposal of Asset (Other income) | | 6,000 |
Let's say you have fully depreciated the truck. Here's the journal entry for that scenario:
| | Debit | Credit |
| Bank Account | 19,000 | |
| Loan Payable | 47,000 | |
| Accumulated Depreciation | 80,000 | |
| Truck (Fixed Asset to close) | | 80,000 |
| Gain on Disposal of Asset (Other income) | | 66,000 |
