Please advise me on the correct accounting procedure:
Asset is a truck:
- Asset account
- Asset sub-account for Accum. Depreciation
The vehicle had a minor repair job done:
- Insurance claim handler estimated the total to be 2000
- Our deductible is 500
- So insurer sent a check payable to our company in the amount of 1500
- Auto repair shop total cost was 1800
Also, since the vehicle was damaged during non-business operations (it is an executive's vehicle, a 50% member of the LLC), any out-of-pocket costs were paid by that member.
So, the cash transactions that are applicable are (I have not entered any of these yet, just the bill from the repair shop for 1800):
1. A debit to our bank account for the 1500 check sent by insurer
2. A credit to our bank account for 1500 worth of the repair cost
3. A credit to the partner's capital account: current year contributions in the amount of 300
What is the correct way to go about recording this process in the books?
If you use account names like Insurer (debtor), Provisions for Insurance, etc. etc. PLEASE specify what type of account those are: Current Asset/Liability, Income, Expense, Other Income, Other Expense, etc.
I know there will be a gain of roughly 200 on the books.
