Dear all,
We traded in our old vehicle for a new one. The numbers are as follows (I simplified the numbers)
Selling price of new vehicle: $40,000
Bought the old vehicle a few years ago at: $30,000.
Trade allowance now: $20,000
We paid $40,000-$20,000=$20,000
Does it look right if I record the transaction this way?
(The difference between what we paid for the old car and its current trade-in value)
Debit accumulated depreciation of old vehicle fixed asset account $10,000
Credit Old vehicle asset account $10,000
(The trade-in value)
Debit New vehicle asset account $20,000
Credit Old vehicle asset account $20,000
(Our payment)
Dr. New vehicle asset account $20,000
Cr. Expense account $20,000
We are tax-exempt organization so there is no sales tax.
Thank you,
Sacca
