How do you record insurance proceeds that were partially paid to company and partially paid directly to auto financing company for an asset with a zero book value. Example: the company used the Sec 179 to write off the vehicle in the first year so there is no asset value on the books. There was a 27,000 payable for this vehicle at the time it was totaled. The insurance company valued vehicle at 39,500, paid the lender 27,000 and sent company check for 12,500. How to (1) record the 12,500 (2) remove the payable of 27,000 and (3) records the gain/loss.
