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Faith7430
March 5, 2021
Question

Sale of a fixed asset to a customer making payments

  • March 5, 2021
  • 1 reply
  • 0 views

What is the best way to record the sale of a company vehicle to a customer who will be making monthly payments over 5 years? 

1 reply

Rose-A
Rose-A
March 5, 2021

The best way to record the sale of the vehicle is by entering a journal entry in QuickBooks Desktop, Faith7430.

 

When you sell a company-owned vehicle to a customer, this decreases your Fixed Assets. Let me show you how to enter a journal entry for the sale:

 

  1. Click Company at the top menu bar and choose Make General Journal Entries.
  2. Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
  3. Hit Save & Close.

 

However, using this method (journal entry) needs the assistance of an accounting professional for the accounts you need to use. Also, they can help and guide on which account to debit and credit.

 

Here's a great article you can check to know more about the process: Recording and depreciating assets. It provides in-depth details on how you can manage and track these transactions in QuickBooks Desktop. Even if this article is for QuickBooks Online US, the same principles can be applied to your desktop account.

 

Please update me on how it goes or if you need more help about recording your sales and anything else about QuickBooks. I'll be on standby for your response. Wishing you a great and productive weekend!

Rose-A
Rose-A
March 7, 2021

Hi, Faith7430.

 

Hope you're doing great. I wanted to see how everything is going about the sale of a fixed asset issue you had the other day. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I'd be happy to help you at anytime.


Looking forward to your reply. Have a pleasant day ahead!

W
WendyCAA
June 23, 2021

Hi Rose! I have a similar question & hoped you could assist. (We use QB Enterprise 21.0 Desktop, if that matters.)

 

We closed our construction division & sold our remaining equipment to our now former general contractor. The sale consisted of 1 vehicle, 4 pieces of heavy machinery & a bunch of other smaller (non-titled items ie hand tools, ladders, etc). I've wrapped up the purchase agreement, repayment schedule & UCC filing. However, I'm a little stumped as for the proper JE. Unfortunately, before I came on board, which is when all the original purchases were made (all in cash), so not all are notated in our fixed asset account. It appears lump sum JE's were made without great details. Thankfully, all except 2 pieces of the larger equipment were listed on our depreciation schedule. That said, it looks like the remainder were booked to small hand tools & fully expensed at the time of purchase.

 

I assume I need to record a loss on the assets, since all were sold for substantially less then our original purchase price & have not been fully depreciated? (Actually, they were sold significantly less then current market value.)

 

Another note, we are charging interest on the monthly payments (5 year term).

 

Would I record the entire sale as something similar to (not actual numbers):

 

Note Receivable                     100000

Accumulated Depreciation     60000

Loss on Sale of Fixed Asset   40000

          Equipment                                135000

          Vehicle                                         45000

          Small tools                                  20000

         

Then, record each monthly payment:

Other Income                         5000

Interest Income                       500

          Note Receivable                         5500

 

 

 

 

             

         

 

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