Vehicle depreciation in QuickBooks vs 1120s

Kt0987 · ‎January 18, 2020

I’m trying to make sure my tax form 4797 is the same as my inputs into my QuickBooks depreciation and sale/trade in numbers.
Form4797(1120s)

line 20: 12,500 (trade in value)

line 21: 30,789 (original cost of vehicle)

line 22: 23, 193 ( depreciation on vehicle)

line 23: 7,596 (30,789-23,193)

line24: 4,904 ( total gain?)

We trades in the vehicle for 12,500 but paid of its loan of 5,580.65.
so my question is how do I input this into QuickBooks and be able to close out the old loan and open a new loan with the diffence between trade in value and loan pay off applied to the new loan?

Rustler · ‎January 19, 2020

trade in value does not pay off a loan, trade in value is like a sales discount, it does not get entered in your books
realize that in QB you do accounting, it does not always match the IRS bookkeeping

you do not say if the old loan was rolled up into the new loan, or if the company paid it off first and then traded in the old vehicle

create a new fixed asset account for the new vehicle and its associated accumulated depreciation account

journal entries (OT=old truck, NT=new truck, *** means use the balance in that account)

debit OT depreciation ***, credit NT fixed asset
debit NT fixed asset, credit OT fixed asset ***

enter the down payment if you made one and use NT fixed asset account as the expense for the payment

if the company paid the old loan directly, enter that payment and use the old loan as the expense for the payment
but
if the old loan was rolled into the new loan, journal entry

debit old loan for the loan balance
debit NT fixed asset for the difference between the new loan amount and the old loan balance
credit the new loan liability account you create

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Rustler · ‎January 19, 2020