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darinsquared
January 19, 2022
Question

journal entry

  • January 19, 2022
  • 2 replies
  • 0 views

I recently made a capital purchase of equipment in which I traded off existing equipment. There was no financing, just a cheque payment. How do I make a journal entry to credit the full value of the equipment to my "Equipment Asset" account  and debit the old equipment? How do I account for the cheque payment of the difference in prices when the asset is the actual value?

2 replies

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Nick K
January 19, 2022

Hi darinsquared.

 

Being able to account for the cost of different items and knowing how to enter them is the cornerstone of accounting. I'd be happy to point you in the right direction for this.

 

In order to know how to enter your equipment's value and what the total amount is I recommend reaching out to an accountant as they're trained in how to make these entries. If you don't have an accountant no worries, we can help. You can go to our Find an Accountant page to find one in your area.

 

If you have any questions let us know and we'd be happy to help.

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NEVER
January 28, 2022

This is a multi-step process:

 

1) Create a Sales Receipt for the full amount of Equipment being traded, made out to the business you are purchasing the new equipment from. Deposit the funds to a Bank type account called Clearing, or Barter, or whatever makes sense to you.

 

2) Open your Fixed Asset Item List, select the Old Equipment and complete the Sale details. Step 1 & 2 remove the equipment from your Fixed Assets.

 

3) Record the Vendor Bill for the new equipment for the FULL Value, using the Fixed Asset Account.

 

4a) Pay part of the bill from the Clearing Account (no funds actually change hands)

4b) Pay the balance from your regular chequing account (record the cheque you wrote)

 

5) open the Fixed Asset Item list and complete the Purchase details

 

That should do it.

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