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Correct accounting for sale of a fixed asset

I recently sold a trailer that was purchased and used for business purposes. I know this shouldn't be entered in as an item sold to a customer.

 

What would be the correct way to enter this transaction into QuickBooks?

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Best answer 07-18-2019

Accepted Solutions
Established Community Backer ***

Re: Correct accounting for sale of a fixed asset

Create an income account called gain/loss on asset sales.
Calculate and post partial year depreciation.

 

Then journal entries

debit accumulated depreciation and credit gain loss for the amount in the accumulated depreciation account

 

debit gain loss and credit the fixed asset account for the total in the fixed asset account

 

enter the payment for the sale as a deposit and use the gain loss account as the source account for the deposit

Established Community Backer ***

Re: Correct accounting for sale of a fixed asset

You never need a name on sales but if the purchaser were a regular customervuou can - in addition to procedure outlined by Rustler - sell it on a Sales Receipt with customer name. You would need a sales item that posts against either the fixed asset or the gain on asset sale account and then proceed with the rest of the journal entry.

2 Comments
Established Community Backer ***

Re: Correct accounting for sale of a fixed asset

Create an income account called gain/loss on asset sales.
Calculate and post partial year depreciation.

 

Then journal entries

debit accumulated depreciation and credit gain loss for the amount in the accumulated depreciation account

 

debit gain loss and credit the fixed asset account for the total in the fixed asset account

 

enter the payment for the sale as a deposit and use the gain loss account as the source account for the deposit

Established Community Backer ***

Re: Correct accounting for sale of a fixed asset

You never need a name on sales but if the purchaser were a regular customervuou can - in addition to procedure outlined by Rustler - sell it on a Sales Receipt with customer name. You would need a sales item that posts against either the fixed asset or the gain on asset sale account and then proceed with the rest of the journal entry.