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QuickBooks Expert? Need Help with general journal entry!

Hello everyone. If someone is very familiar with quickbooks maybe you can help me.

We sold a fixed asset at a loss and we are encountering a problem when recording the transactions. We followed the quickbooks recommended procedures for selling a quick asses:

  1. created an invoice from Fixed Asset List
  2. marked asset as sold and inactive.
  3. Made journal entry with 3 lines: original cost (credit fixed asset account), sale cost (debit bank account), difference (debit other income account).

This works fine, and everything seems to be where it should be. The item appears as sold, the "assets account" has a deduction for the full original cost of the item, the "other income" account has a negative entry for the loss, and the checking account has the deposit for the sale price.

However, the problem is that we now have an "unpaid" invoice that is actually paid. Remember during step 1 we created an invoice from the fixed asset list but the payment was recorded through the journal entry, which according to intuit is the only way to properly apply the loss to the other income account and modify the fix asset account. I can't figure out how to make this invoice "paid" without duplicating the deposit to the checking account. That is, if I try to set the invoice to paid by 'receive payments' an additional deposit is recorded to the bank account.

So my question is: How do I set this invoice to paid if I recorded the payment through a journal entry? Or how can I clear this invoice without recording any additional deposit to the bank account

Thank you so much.

Nestor L. Lopez Explorart Films.

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explorart
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***This is bad accounting. The difference should be the balance in the other income a/c after all transactions have been posted to the account. The profit/loss should never be posted. It profit or loss should be the result.***

The proper accounting entry for sales of assets are: Credit: Asset A/c at Cost Debit: Sale of Asset A/c Debit: Asset A/c with depreciation to date Credit: Sale of Asset A/c (other income a/c) (this will give you the net book value i.e. cost less depreciation) Debit: Bank A/c Credit: Sale of Asset A/c (other income a/c) (this records how much you got for the asset) (the difference between both gives you the profit or loss)

My question is what amount is now left in your asset a/c? How was the depreciation handled? What general ledger code did the asset get posted to when it was sold?

To me it seems that the invoice and the first journal are the same transaction. Where did the invoice end up. Is it in a customers a/c?

If it is in a customer a/c then the money received should be posted against that customers a/c.

The underlying transactions would like like the following: Debit: Customer a/c (Debtors control a/c) (J1) Credit: Other income a/c (Net book value of asset i.e. cost less depreciation) Debit: Bank A/c Credit: Customer A/c with money received (Debtors control a/c)

Now you would do the following 2 journals: (J2) Credit: Other Income a/c with original asset cost (J3) Debit: Other Income a/c with the assets accumulated depreciation to date for that asset (This results in the net book value of the item in the Other income a/c) There would now be 3 transactions in this a/c and the balance is the profit/loss on the sale of the asset and will be listed in the trial balance.

I don't use quick books, I would check those recommended journals with support.

You need to set out which general ledger a/c's have been posted to when the asset was sold. And is the cost and accumulated depreciation a/c's automatically posted to when the invoice for the selling price is raised?

Lots of double entry, but that's how it works!

-Nilsson

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nilsson

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