Question

how do record purchased car

Forum|Forum|5 years ago
January 24, 2021
1 reply
4 views

i purchased a car $46,328.23 with trade in that gave me $9,250

my old car still shows 33,615.32 under fixed asset after depreciation. the loan for old car has been paid off already and the new car was paid in cash (1k down payment credit card) + (5k payment credit card) + ($9,500 trade in value) + (31,078.23 payment check) the company will get a loan later from the owner to cover this instead of getting car loan from the dealer How should i record this? 46,32823 include sales tax (4302.23) processing fee (85) DMV (30) registration ($15) emission exemption fee ($8) should i include those tax and fees into the fixed asset or record as expense to appropriate category expenses?

QuickBooks Desktop

BigRedConsulting

Level 15

Use two different asset accounts to track the cars, and two different accounts for the new car:

1) Depreciate the old car down to 9,250, 'cause that's all it was worth when you traded it in.

2) Create a new asset account for the new car and enter 46,328.23 as the balance, using a new liability account (more or less a loan) as an offsetting account 'cause that's what it was worth and what you owed at the moment of purchase.

3) Transfer the old car's value of 9,250 to the liability account to reduce the balance

4) Similarly, in the credit card account, use the liability account for the 1k payment and 5k payments when you record those transactions.

5) Also, use the liability account for the 31,078.23 payment by check.

In the end, the liability account will have a 0.00 balance and the new asset account a 46,328.23 balance.

If course the new car isn't worth that you paid anymore, so perhaps use https://www.edmunds.com/ or similar site to value the new car and depreciate it as well.

M

mihosakaiAuthor

thank you for the instruction.

for now we paid off full amount by credit card and check. the owner will loan the same amount after few months if the company cash flow is tight...

so for now we dont need liability account for the new car right?

instead just record transaction in credit card and select this new car fixed account for category? also write a check page and record 31078.23 using fixed account?

also transfer old car value to new car..

i should do GE to transfer right?

Create a new asset account for the new car and enter 46,328.23 as the balance,

should i enter 46328.23 to new asset account or should this number come from credit card entry and check entry?

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