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Level 4

Making a sold fixed asset account inactive...

I just sold one of my tractors. I debited my bank account and "Loss on Sale of Fixed Assets" account (I sold it for slightly less than my book value), and credited the parent account for the tractor (not the depreciation account of original cost account). Two questions... 1. Does it look like I recorded the sale properly? 2. Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive? I understand that QBO will make an "adjusting transaction" to keep the financial information on the books, but other than that I'm not sure what that means. Thanks.
Solved
Best answer March 01, 2020

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Level 11

Making a sold fixed asset account inactive...

@PVOLLC 

 

"Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive?"

 

You need to reverse the depreciation account and original cost account, not the parent tractor account. 

For example, your entry should be:

  1. Original cost = $1,000 (credit)
  2. Depreciation = $500 (debit)
  3. Sold it = $400 (debit deposit)
  4. Loss on sale of FA = $100 (debit)

You can make accounts inactive once the balance is zero.

 

Hope this helps!

 

View solution in original post

2 Comments
Highlighted
Level 11

Making a sold fixed asset account inactive...

@PVOLLC 

 

"Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive?"

 

You need to reverse the depreciation account and original cost account, not the parent tractor account. 

For example, your entry should be:

  1. Original cost = $1,000 (credit)
  2. Depreciation = $500 (debit)
  3. Sold it = $400 (debit deposit)
  4. Loss on sale of FA = $100 (debit)

You can make accounts inactive once the balance is zero.

 

Hope this helps!

 

View solution in original post

Highlighted
Level 4

Making a sold fixed asset account inactive...

@vpcontroller Sure does. Thanks!

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