I am trying to complete a capital asset purchase with trade-in, valued at $8000. However, the trade-in vehicle was held personally and not within the company. How do I account for the $8000 difference between asset value and loan value? Obviously, I have no capital asset to 'sell'. I guess, you could say that we personally paid $8000. I have no personal drawings account within the business either.
ADMIN RESPONSE
Feb 10, 2025
The value of the trade-in will need to be recorded to Shareholder Loans. Instead of a C- line as you would normally do if it was a company held asset, use an L+ line to increase the balance on the Shareholder Loan account. Hope that helps!
