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Community Contributor *

Journal Entries for Fixed Asset Sale(vehicle) with a loan liability

I just sold a vehicle that was bought in 2016 (full cost of vehicle deducted via section 179).  There is a loan for the car.  Not sure how to enter the journal entries.

Cash received = $14700

Loan Payable Liability = $4894.63

Fixed asset (vehicle) = $15,172.00

Thank you for your help.

 

Solved
Best answer 03-29-2019

Accepted Solutions
QuickBooks Team

Re: Journal Entries for Fixed Asset Sale(vehicle) with a loan liability

It's nice to see you here, @AngeliqueVal,

 

Thanks for joining our forum. I can share some insights on how to record the sale of your vehicle and the loan liability.

 

When you sell a company owned vehicle, this decreases your Fixed Assets. Let me show you how to enter a journal entry for the sale:

  1. Go to the Company menu.
  2. Click on Make General Journal Entries.
  3. In the Account column, add the Bank Account you want to record the sale.
  4. Add the amount ($14,700.00) in the Debit column.
  5. On the second line, add the Depreciation Expense, then enter the difference between the actual FA amount minus the selling price of the vehicle in the Amount column. (Example: $472.00)
  6. On the third line, enter the Fixed Asset (vehicle), then add the amount of $15172.00 on the Credit column. Please see illustration below:

 

 

Once you recorded the sale, you can later write a check for the remaining loan payable balance of $4894.63.

 

Here's a great article you can check to know more about the process: Recording and depreciating assets.

 

Please update me on how it goes or if you meant a different thing. I'll be on a standby for your response. Wishing you a great and productive weekend!

3 Comments
QuickBooks Team

Re: Journal Entries for Fixed Asset Sale(vehicle) with a loan liability

It's nice to see you here, @AngeliqueVal,

 

Thanks for joining our forum. I can share some insights on how to record the sale of your vehicle and the loan liability.

 

When you sell a company owned vehicle, this decreases your Fixed Assets. Let me show you how to enter a journal entry for the sale:

  1. Go to the Company menu.
  2. Click on Make General Journal Entries.
  3. In the Account column, add the Bank Account you want to record the sale.
  4. Add the amount ($14,700.00) in the Debit column.
  5. On the second line, add the Depreciation Expense, then enter the difference between the actual FA amount minus the selling price of the vehicle in the Amount column. (Example: $472.00)
  6. On the third line, enter the Fixed Asset (vehicle), then add the amount of $15172.00 on the Credit column. Please see illustration below:

 

 

Once you recorded the sale, you can later write a check for the remaining loan payable balance of $4894.63.

 

Here's a great article you can check to know more about the process: Recording and depreciating assets.

 

Please update me on how it goes or if you meant a different thing. I'll be on a standby for your response. Wishing you a great and productive weekend!

Community Contributor *

Re: Journal Entries for Fixed Asset Sale(vehicle) with a loan liability

Thank you for the response.  It seems to have worked.  As for the payoff of the loan, I picked write a check and used the loan liability account as the offset.  That seems to have worked as well.  However, there was a $7 difference between what is in QB and the payoff, so there is still a balance sitting in the long term liability for that vehicle.

QuickBooks Team

Re: Journal Entries for Fixed Asset Sale(vehicle) with a loan liability

Hello there, @AngeliqueVal.

 

Allow me to step in and provide some information about the $7 difference between QB and the payoff.

 

That should not have a difference after following the steps provided by my colleague above. To fix this, you'll need to check if this Loan is an underpayment. Once verified, you can modify the created check and enter the correct amount of the loan.

 

You can also double check the created Journal Entry if there are incorrect entries you've entered. Once checked, you'll need to edit the Journal Entry to record the transaction correctly.

 

That's it! Let me know if you have any other questions about QuickBooks Desktop. I'll be always around to help.