How to record journal entry if I sold vehicle use 80% in business?

Kanyanat_acc · ‎May 12, 2024

Hi,

I have a question about record journal entry if I sold vehicle that use 80% in business.

For example, The cost of basis for vehicle is 40,095, Business Use Percentage 80%, Accumulated depreciation is 22,479 , Sales Price is 9,597.

On the Disposal summary report, there is no gain/loss because the cost of basis is calculated by 40,095 x 80% = 32,076. So, the calculation for gain/loss = 32,076 - Accumulated Depre 22,479 - Sales Price 9,597 = 0.

As per below, what's account category should I record in debit for amount 8,019 to make the account balance and I can disposal the assets from my balance sheet?

Dr. Cash on hand 9,597

Dr. Accumulated Depreciation 22,479

Dr. ??????? 8,019

Cr. Vehicle 40,095

Thank you for your help.

Rainflurry · ‎May 13, 2024

@Kanyanat_acc

What entry did you make to record the vehicle's original fixed asset basis of $40,095? It was a debit to the vehicle's fixed asset account and a credit to what account(s)?

Kanyanat_acc · ‎May 13, 2024

Hi,

Actually I have no idea because I was received balance sheet from my client’s previous accountant since 2020. So, I made journal entry to input all assets , liability and equity from balance sheet I received.

Rainflurry · ‎May 14, 2024

@Kanyanat_acc

I would record it to 'Ask My Accountant' and let your client's CPA reclass it. The issue is that the entire asset value of the vehicle is on the company books when the company only owned 80% of the asset. So, what credit entry(ies) offset that 20% (rhetorical question)? The effect of that 20% credit entry on the company's book should have been debited at some point to allocate your client's 20% personal use and the fixed asset credited 20% so that the current entry to close the fixed asset should be 32,076, not 40,095.

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How to record journal entry if I sold vehicle use 80% in business?