Removing an asset - unusual situation

[Gmnijade]

Here's the problem. In 2003, we personally purchased a truck for cash. The intention was to sell it to our LLC. The truck was set up in the business as an asset with a loan (to be paid to us personally) and the accountant applied depreciation every year. Things have changed and the business can no longer afford to continue to purchase the truck. I asked the accountant how to remove it from the accounting. He wrote me and said "take out truck @ book - also take payments - JE - no cash" Bless his heart, he thinks I am much more savvy about this than I am. I worked with the removal of the truck and created a journal entry which covered the whole thing and brought the asset to a zero balance. Thanks to QB pro help! But that leaves the balance due of the loan hanging there as a Long Term Liability. I tried a JE against our "slush" loan to company (which tracks personal money used for business and business money used for personal) I could see that was not right. Since there was no sale, therefore no money received by the business for the truck, I am at a loss as where I should go with this. Any assistance from someone would be greatly appreciated. I have done a search in the forum and found wonderful information and answers, just not for my situation. Thanks in advance.

[lisa_mn]

I'd ask your accountant to lay it out in detail for you.

[Joe Williams]

I aggree with Lisa. Ack the accountant if BOTH the loan and asset should be removed. If that is the case the JE goes Credit the asset and Debit the loan to zero both.