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Level 1

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

Best Answers
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Anonymous
Not applicable

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!

View solution in original post

10 Comments
Highlighted
Anonymous
Not applicable

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!

View solution in original post

Highlighted
Level 1

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.

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QuickBooks Team

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.

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Level 2

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

What if I never recorded an asset and only a note payable for the vehicle loan? 

We received a check for $988.43 for the sale of the van and the amount of the loan was $12473.71...

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Level 2

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

What if I never recorded an asset and only a note payable for the vehicle loan? 

We received a check for $988.43 for the sale of the van and the amount of the loan was $12473.71...

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Moderator

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

Thanks for sharing additional details of your concern, vanidosa27.

 

May I know how did you track your loan vehicle? In QuickBooks Desktop, there is a process of tracking loans and you can follow the steps below.

 

The First step is to set up a liability account. Here's how:

  1. From the Lists menu, click Chart of Accounts.
  2. In the Chart of Accounts, right-click anywhere and select New.
  3. In the Add New Account screen, click the Other Account Types radio button and from the drop-down and choose either: Other Current Liability or Long Term Liability.
  4. Click Continue.
  5. Enter a name and number for the account.
  6. Click Save & Close.

Then, set up the vendor from the Vendor Center. Once done, you can record the loan amount. 

 

For the complete steps on how to track loans in QuickbBooks Desktop, check out this article (proceed to Step 2): Manually track loans.

 

Get back to me if you have follow-up questions, and I'll work to get those answered for you. I'll be keeping an eye out for your reply.

Highlighted
Level 2

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

I do have the loan set up as a long term liability. My question was how to remove it from the system. We sold the vehicle and received $988 (check). So the JE is Debit cash $988, Debit the LT liability for $12,500. But what is the credit? 

Thank you for all your help and Merry Christmas!!!

Highlighted
QuickBooks Team

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

Greetings, @vanidosa27.

 

You can include the Depreciation account on the record if the value of the sold vehicle was depreciated. However, if the remaining balance of the Long term Liability are still be payable, I'd suggest to check this with an accountant. So you'll be guided accurately in choosing the category type of account to use in recording your transactions.

 

Feel free to leave your comments below if you have other questions. I'm always here to help.

 

 

 

 

 

Highlighted
Level 2

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

Thank you for your comment. I never added the asset because it was a vehicle loan so I didn't feel we had an actual asset until the loan is paid off. So, nothing was depreciated. This is why I am confused as to what the crebit should be. 

Highlighted
QuickBooks Team

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

It’s our pleasure to help, @vanidosa27

 

To stay on top of your account when tracking loans, you’ll have to set up a liability account, a vendor and record the loan amount. Then, when creating a journal entry, you’ll just have to debit the loan asset account and credit the liability account.

 

You can also consult an accountant to get advice on what account to use. 

 

See the following article for detailed guidance on how to manually track loans

 

I’m always here if you still need help with your account by leaving a comment below. Have a wonderful day! 

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