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A vehicle used 100% in my business, single LLC, was a total loss. How do I record the insurance payout to the notes payable and the loss of the asset ? Are journal entries needed?
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RainflurryAnswer
Nov 10, 2023 1:21 PM UTC
A journal entry is generally the easiest way to record it. To make the entry, you need to know how much depreciation was taken on the vehicle (accumulated depreciation). You may have either a gain or loss on the asset disposal. Here is the journal entry:
| Debit | Credit | |
| Bank Account (if cash received beyond loan payoff) | XXX | |
| Accumulated Depreciation (to close) | XXX | |
| Loan payable (insurance payoff - to close) | XXX | |
| Vehicle Fixed Asset (original cost - to close) | XXX | |
| Gain/Loss on Disposal of Asset (to balance journal entry - loss if debit balances, gain if credit balances) |