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Bookkeeping – How to enter the transaction to sell an asset?

images/Client phoned.jpgClient called and asked how to enter the transaction to sell an asset – a car purchased for $60,000 in the business books.

First raise an invoice (service type) to the buyer with GST for $50,000 and allocate to Sale of Assets (need to create the account in the # 4’s (MYOB) or Sales (Quickbooks) with this name. The other side of the sale invoice is automatically to Trade Debtors (as you are owed the money).

When you are paid, you process the Receive Payment which draws from Trade Debtors and deposits to the bank.

Now there is still the $60,000 in the asset, but with the $50,000 sale, this means a $10,000 loss.

What is the next step to deal with these amounts?

Since the cost of the asset was in the balance sheet, we are left with balances in the asset and a loss in this scenario still to be dealt with. The way to finish off the sale is to raise the following general journal.

DR       Sale of Asset                      50,000               Sale account

CR       Loss on Sale of Asset           50,000               Create an expense account

 

DR       Loss on Sale of Asset           60,000

DR      Accum. Depn – Asset         0                (Enter what is on the Bal Sheet if a figure there)

CR       Asset (at cost)                    60,000

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Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
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