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Rainflurry
Level 14

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@impedance19 

 

"and then make a journal entry transferring the principal amount paid that month from the "deferred gain on sale of asset" to the "gain on sale of asset" accounts."

 

Not all of the principal balance received is gain.  The amount of gain on the principal portion is determined based on the gross profit percentage of the sale:

GPP Image.JPG

 

 

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