The asset is sold for a greater amount than book value. It is sold on contract with annual payments over a three year period.
The asset is sold for a greater amount than book value. It is sold on contract with annual payments over a three year period.
2 Responses to “What Are The Correct Journal Entries For The Sale Of An Asset On A Contract?”
(for the sale of the depreciable asset)
Debit Cash (for the amount received)
Debit accumulated depreciation (related to property)
Debit Loss on sale (if applicable)
Credit Depreciable Asset (to take asset off the books)
Credit Gain on sale (if applicable)
(for when you pay off the note)
Debit Note Payable (remainder of contract payments)
Credit Cash
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