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rt041581
Level 1

Journal Entry for a Purchase and Trade-in of Business Vehicle.

I'm trying to figure out how I should enter a Journal Entry for the trade-in and purchase of our business vehicle. This is what I have.
 
Old Truck 
Payoff Balance Amount: $19,845.46
Old Truck Trade-in Value: $14,500
Down payment (Personal Funds): $5000
Negative Equity: $345.46
 
New Truck Price: $34,797.18 + Negative Equity $345.46 = $35,142.64 (NEW LOAN AMOUNT)
 
 
Information in Quickbooks (Old Truck)
 
Fixed Asset in Quickbooks: $20,610.71
Depreciation in Quickbooks: $1031.00
Fixed Asset Balance in Quickbooks: $19,579.71
 
Original Loan: $20,610.71
Payments: $909.80
Loan Balance: $19,701.91
 
Not sure how I should enter this journal entry. Please help!
2 Comments 2
Rustler
Level 15

Journal Entry for a Purchase and Trade-in of Business Vehicle.

calculate and post partial year depreciation

create the new fixed asset account, new car; and a sub account for accum. depreciation
create a new car loan liability account

debit new car, credit old car for the value in this account
debit old car accum. depreciation for the value in this account, credit new car
debit old car loan for the value in this account, credit new car loan
write the check for the down payment and use the new car account as the expense (reason) for the check

find the difference between the present amount in the new car loan and the actual new loan, then
debit new car, and credit new car loan for that amount

Dovergirl
Level 1

Journal Entry for a Purchase and Trade-in of Business Vehicle.

The Business purchased a new truck for $94,000.  less trade in $76000,  so $18,000.  HST paid $2,350.  Payout liens against trade in  $42,000.   total purchase price $62,000.    the $62,000 is now financed.  there is a new finance charge of $5,680 over 60 months.  3.49%  monthly payment of $1,132.     How do I show this with journal entries????  I am fairly new at this.    

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