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sale of a leased asset with gain

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  • sale of a leased asset with gain

    trying to record a sale of leased asset with tax component - received compensation including tax after payout of lease was processed. amortization has been taken into account unfortunately entry is showing a loss instead of a gain ?

  • #2
    Tax component - that sounds like you are not in the US, if so I can not help with how that is entered, but for the asset itself
    create an income account called gain/loss on asset sales
    calculate and post accumulated depreciation for the time period the asset was in use this year

    then journal entries
    debit gain/loss and credit the fixed asset account for the balance in the fixed asset account
    debit fixed asset accumulated depreciation and credit gain loss for the balance in the accumulated depreciation account
    deposit the payment received and use the gain/ loss account as the source account for the deposit