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by natalie1225 on December 1st, 2007

natalie1225

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What is the journal entry to record sale of assets?

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  • by dostew on March 11th, 2008

    dostew

    It also depends on the asset.

    If the asset is an inventory item you would do this:

    Debit Cash (Asset Account)
    Credit Sales Revenue (Revenue Equity Account)

    Debit Cost of Goods Sold (Expense Equity Account)
    Credit Inventory (Asset Account)

    If the asset was sold, but not paid for, then you would Credit Accounts Receivable (Liability Account) until paid for in cash.

    If it is a fixed asset (like a building, vehicle, machinery, etc), sold for cash.

    Debit Cash
    Debit Accumulated Depreciation
    Credit Building
    Credit Gain (if asset is sold for more than the book value (book value = original cost minus accumulated depreciation)

    or

    Debit Loss if asset is sold for less than the book value

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