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trouts
Level 2

Bought New Vehicle, Paid off Old.

Alright, I am still learning. This is what I got from our tax accountants. Can someone PLEASE help me, figure out how to debit/credit this into a journal entry. I am in school for this and just struggling with the chapter in and of itself. Thanks in advance! 

 

Screenshot 2024-10-17 104835.png

Solved
Best answer October 17, 2024

Best Answers
Rainflurry
Level 14

Bought New Vehicle, Paid off Old.

@trouts 

 

Here's the journal entry:

 

 DebitCredit
2025 BMW (fixed asset)105,663 
Note Payable - 2021 BMW15,269 
Accumulated Depreciation79,249 
     Cash 5,000
     Note Payable - 2025 BMW 85,128
     2021 BMW (fixed asset) 91,808
     Gain on sale of asset (other income) 18,245

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5 Comments 5
Rainflurry
Level 14

Bought New Vehicle, Paid off Old.

@trouts 

 

Here's the journal entry:

 

 DebitCredit
2025 BMW (fixed asset)105,663 
Note Payable - 2021 BMW15,269 
Accumulated Depreciation79,249 
     Cash 5,000
     Note Payable - 2025 BMW 85,128
     2021 BMW (fixed asset) 91,808
     Gain on sale of asset (other income) 18,245
trouts
Level 2

Bought New Vehicle, Paid off Old.

THANK YOU! So I already paid the 5K via a check through this company already. Should I still do the journal entry for the 5K? I forgot to mention that in the beginning.. Thank you again! 

trouts
Level 2

Bought New Vehicle, Paid off Old.

Thank you! I tried to respond before. So I have everything in. My final question is - we already paid the cash out of the checking account. By that I mean I wrote a check for 5K, for the initial deposit. Do I still put that on the credit side? I can't relate it to a cash account so it'll have to be the Business Checking account I put it against on the left column. Won't that affect my actual cash balances? Thank you! Screenshot 2024-10-17 131933.png

Rainflurry
Level 14

Bought New Vehicle, Paid off Old.

@trouts 

 

"I wrote a check for 5K, for the initial deposit."

 

In that case, the best thing to do (IMO) is to pull up the check and delete whatever account you assigned to it when you wrote it.  Enter all of the debits from the journal entry as positive amounts and all credits (except the $K check) as negative amounts.  That should leave the check balance at $5K and it will make the exact same journal entry but it uses the check to do it.  This way, you have the check to reconcile on your bank statement.  Finally, make sure to delete the journal entry.   

Rainflurry
Level 14

Bought New Vehicle, Paid off Old.

@trouts 

 

EDIT: Enter all of the debits from the journal entry as positive amounts and all credits (except the $5K check)

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