cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

I have a loan for equipment but we traded that for another piece of equipment. Cost of new piece 46,000- trade in value $20,000. What are the journal entries on loan?

 
3 Comments
Highlighted
Community Champion

I have a loan for equipment but we traded that for another piece of equipment. Cost of new piece 46,000- trade in value $20,000. What are the journal entries on loan?

Need more information, please.

What was the outstanding loan balance on old equipment?

What is the new loan amount?

 

It can all be done in an "Expense" rather than a Journal Entry but with a little more info than merely going by the difference between $46k and $20k and guessing new loan is $26

 

We still have to address getting the old asset completely off the books in this and how much depreciation you will have to recapture on Form 4797. That's a tax item and not wholly an accounting item that needs to be attached to the trade/loan calculation

Highlighted
Level 1

I have a loan for equipment but we traded that for another piece of equipment. Cost of new piece 46,000- trade in value $20,000. What are the journal entries on loan?

The original Loan is still around $14,000. Then we purchased a new piece at $46,000 but traded in equipment (all under this same loan originally) for $20,000- what I need to know is how do I made the journal entry for the trade in? I would Debit the loan for $20,000 but what would I credit? (would I credit equity?)

Highlighted
Community Champion

I have a loan for equipment but we traded that for another piece of equipment. Cost of new piece 46,000- trade in value $20,000. What are the journal entries on loan?

New fixed asset is $46000. Less trade in of 20? or after trade in = 20k to pay plus original loan or in addition to original loan? I am going to make some assumptions and you can correct me

 

DR Fixed Asset New  $46000

CR Fixed Asset Old    $26000

CR Loan                        $20000 which puts your loan now at $34k +/- ? Hard to imagine that you traded in something with a loan on it at half value of new and that loan amount stayed the same without any cash out of pocket

 

Increasing loan is credit, paying down is debit.

Need to get in touch?

Contact us