USA Purchased new asset and traded one in

[Ginad]

My company purchased a new vehicle and traded another in. New vehicle was sold to us for $58,895.33. We were given $21,000 on our trade-in ( it was not fully depreciated). Amount to be depreciated to time of trade-in is $3448.98. Original value was $33,114.44. Value of trade-in after depreciation is $6,087.98. We paid cash for the new vehicle, check amount was $37,895.33. What should my entry be to record this?

 

[DrStrangeLove]

You had a car on your books for Car 33,114.44, Acc Dep - Car 27,026.46, so the book value of that car was 6,087.98, right?

You traded the old car plus cash for the new car, with a sale price of 58,895.33 for the new car, and cash of 37,895.33.

You need a gain in your entry to represent the amount you got for your trade-in over the book value of your old car.

So your entry is:

DR Car......................... 58,895.33 (new car purchase price)
DR Acc Dep - Car........ 27,026.46
CR Car.............................................. 33,114.44 (old car purchase price, plus Acc Dep equals the book value of old car)
CR Cash............................................ 37,895.33
CR Gain on Trade In........................14,912,02 (the difference between your trade-in and its book value--nice!)

"Amount to be depreciated at time of trade-in" refers to what depreciable asset? The new car? The old car? It isn't obvious where it fits into the problem.

 

[Matthew_ Mahgerfteh]

You had a car on your books for Car 33,114.44, Acc Dep - Car 27,026.46, so the book value of that car was 6,087.98, right?

You traded the old car plus cash for the new car, with a sale price of 58,895.33 for the new car, and cash of 37,895.33.

You need a gain in your entry to represent the amount you got for your trade-in over the book value of your old car.

So your entry is:

DR Car......................... 58,895.33 (new car purchase price)
DR Acc Dep - Car........ 27,026.46
CR Car.............................................. 33,114.44 (old car purchase price, plus Acc Dep equals the book value of old car)
CR Cash............................................ 37,895.33
CR Gain on Trade In........................14,912,02 (the difference between your trade-in and its book value--nice!)

"Amount to be depreciated at time of trade-in" refers to what depreciable asset? The new car? The old car? It isn't obvious where it fits into the problem.

You had a car on your books for Car 33,114.44, Acc Dep - Car 27,026.46, so the book value of that car was 6,087.98, right?

You traded the old car plus cash for the new car, with a sale price of 58,895.33 for the new car, and cash of 37,895.33.

You need a gain in your entry to represent the amount you got for your trade-in over the book value of your old car.

So your entry is:

DR Car......................... 58,895.33 (new car purchase price)
DR Acc Dep - Car........ 27,026.46
CR Car.............................................. 33,114.44 (old car purchase price, plus Acc Dep equals the book value of old car)
CR Cash............................................ 37,895.33
CR Gain on Trade In........................14,912,02 (the difference between your trade-in and its book value--nice!)

"Amount to be depreciated at time of trade-in" refers to what depreciable asset? The new car? The old car? It isn't obvious where it fits into the problem.