Fiscal Accounting July 01 to June 30th
Business use 100%
Traded 2018 Cadillac XT5 for 2020 Cadillac XT6
Purchase Price 2018 XT5 10/04/2018 $ 55,437.26
Total accumulated Deprecation $ 55,437.26
Trade in Value $ 27,500.00
loan Balance $ 31,300.80
Total NET Trade in <$ 3,550.80> credit
Here is where it gets tricky
Dealer gave Manufacturer's Rebate on 2020 XT6 $ 2,000.00
Paid Cash of $1,550.80
Brought 2018 XT5 loan Balance to $ 0.00 $ 3,550.80
Purchase 2020 Cadillac XT6 08/13/2020 $66,848.41
New Loan on 2020 XT6 $ 66,848.41
What are the Journal entries
What is the Gain/Loss on this transaction
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Your loan balance is not relevant so you have a sale of your old vehicle for $27,500 and it looks like that's all taxable because that asset is fully depreciated.
Add the other costs to the basis of your new vehicle and subtract the rebate from the basis to get the depreciable basis.
Note sure how you set up your balance sheet so post what it looks like before the trade in.
DR | CR | ||||
OLD AUTO | 55,437.26 | ||||
OLD AUTO ACCUM DEPRECIATION | 55,437.26 | ||||
OLD LOAN | 31,300.80 | ||||
GAIN OLD AUTO | 27,500.00 | ||||
NEW AUTO | 64,848.41 | ||||
NEW LOAN | 66,848.41 | ||||
CASH | 1,550.80 | ||||
UNKNOWN DIFFERENCE | 250.00 | ||||
151,586.47 | 151,586.47 |
This is The Journal entry I | Have so far | |
db | <cr> | |
Trade-in Vehicle Xt5 | -55,437.26 | |
accum dep Xt5 | 55,437.26 | |
New Vehicle XT6 | 66,848.41 | |
loan XT6 | -66,848.41 | |
Trade-In XT5 loan | 27,750.00 | |
Gain/Loss Xt5 | -27,750 | |
cash from checking | -1,550.80 | |
Loan XT5 ( Rebate) | 2,000.00 | |
What Account to <cr> | -2,000.00 | |
This is The Journal entry I | Have so far | |
db | <cr> | |
Trade-in Vehicle Xt5 | -55,437.26 | |
accum dep Xt5 | 55,437.26 | |
New Vehicle XT6 | 66,848.41 | |
loan XT6 | -66,848.41 | |
Trade-In XT5 loan | 27,750.00 | |
Gain/Loss Xt5 | -27,750 | |
cash from checking | -1,550.80 | |
Loan XT5 ( Rebate) | 2,000.00 | |
What Account to <cr> | -2,000.00 | |
153,586.47 | 153,586.47 | |
It Balances but is the REBATE | on the the new | Vehicle |
applied to the Gain on sale |
i posted what i have on the thread. not quite sure how this works??? Thanks for Help.
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