Solved
Sold fixed asset to vendor
What are the entries for selling a fixed asset to a vendor in exchange credit on future goods and services (freight)?
Thanks,
Julien
RainflurryAnswer
Mar 1, 2024 2:07 PM UTC
You will need to create a journal entry to remove the asset, close out the accumulated depreciation taken, record the A/P vendor credit (debit entry in QB), and book the difference to gain/loss. For example, let's assume you had a fixed asset with an original cost of $10K, you took $5K in depreciation and you sold it to the vendor for $7.5K. The journal entry to record that is:
| Debit | Credit | |
| Accumulated Depreciation (to close the amount taken on fixed asset) | 5,000 | |
| Accounts Payable (vendor credit to be applied to future bills) | 7,500 | |
| Fixed Asset (to close) | 10,000 | |
| Gain on sale of fixed asset - other income to balance (debit if loss, credit if gain) | 2,500 |