selling business equipement

Hi Alan,

In this case, on disposal of a fixed asset, the cost is transferred from the fixed asset account to an asset disposal account. This disposal account will consist of accumulated depreciation, proceeds of sale and the cost of the asset; which would then be transferred to the P&L. You would have to create a disposal account if this does not exist already by heading to Settings > Accounting > Account Codes > Create Account Code.

1) The first journal should be as follows:

Debit Accumulated Depreciation (Plant & equipment acc dep) Credit Disposal of Business Equipment

This would transfer aggregate depreciation for the asset up to date to the Disposal account.

2) The second journal would transfer the cost of the asset to the Disposal account:

Debit Disposal of Business Equipment Credit Business Equipment (Asset)

3) Lastly, you should then record the sale of the asset by using the Money In feature for the relevant bank account.

The journal should look something like this:

You can then raise a bill for the new part exchange.

Please let me know if there are any further queries.

Thanks,

Tommy