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J
jkane1
March 15, 2024
Question

Need Help with the Sale of an Asset and the Correct Journal Entry

  • March 15, 2024
  • 1 reply
  • 0 views

Last October, I sold a company vehicle for $25,000. The original purchase price was $27,183. I took $20,446 in depreciation and I had a loan of $13,306.87 on the vehicle that was paid off after the sale. the final check that the business received after the sale and after the loan was paid off was 11,073.94. Is the journal entry attached correct? Any help is much appreciated!

1 reply

Rainflurry
Rainflurry
March 16, 2024

@jkane1 

 

Did you post depreciation to your fixed asset account?  That's what it appears to be.  It's generally made to an Accumulated Depreciation account.  If you posted it to the fixed asset account, your JE looks correct.  Here's how I would have done it but your way looks fine too.  

 

 DebitCredit
Checking Account11,073.94 
Accumulated Depreciation20,446.00 
Loan Payable (to close)13,306.87 
     Company Vehicle: 2021 Ram 27,183.00
     Gain On Asset Sale (other income) 17,643.81
J
jkane1Author
March 20, 2024

Yes, sorry for not extending the column. The second column was "Company Vehicles: 2021 Ram Promaster City:Vehicle - Accumulated Depreciation." Thank you very much for your help with this @Rainflurry. Your JE was very clear and easy to cross reference.

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