Auto loan was sold

I'm not sure, but when this happened to me I just left the vendor ID the same and changed the Vendor Name and Address to the new information.

(My Vendor ID for GTE started out years ago as General Telephone, morphed into Verizon and is now Frontier, all using the same GTE vendor ID. )

Carla

Don't be irreplaceable. If you can't be replaced, you can't be promoted.

That would be fine unless you still had debts and payables to that vendor/lender.

You may want to set up a new vendor to pay the bill to. That way you have the history to the old vendor and the history to the new vendor.

I don't think I'm comfortable just changing the name. My biggest issue is how to "close out" the loan to the first vendor and how to "start" the new loan. I suspect my first step would be to find out the balance on the loan when it was sold and start a new loan with the new vendor for the amount of the balance due. What modification can I make to the old vendor to zero out that loan?

To close out the old loan:

Create a journal entry, debit Accounts Payable (old vendor), credit Other Income.

To start the new loan:

Create a journal entry, debit Other Income, credit Accounts Payable (new vendor).

That would work if the loan was recorded in A/P which most loans are not. I also would not use an Income account as the offset. Use a bank type Clearing or Suspense account.

A loan should be set up as a Long Term Liability account--NOT an A/P entry.

It does not matter who holds the note on the truck so when the loan changed hands all that needs to be done is to switch Vendors when making payments.

Please note that it was the OP who set it up that way, not I. And given his apparent accounting background, I'd say it was probably the best method for him.