Company had fixed asset vehicle that was wrecked and totaled by insurance company. Received payment that was equal to book value. Do I debit Accumulated Depreciation and credit fixed asset? Then when the insurance company check arrives I enter as income then debit income then credit what????
how do I account for a loss of asset
Answers
You'll debit Accum Depreciation, credit the fixed asset, debit cash for the insurance proceeds and credit gain on disposal.
Assume $10000 Fixed Asset at cost with $ 4000 Accumulated Depreciation. Net book value is $6000. Debit Cash for $6000, Debit Accumulated Depreciation $4000, Credit Fixed Asset $10000. No gain, No loss.
Filed Under:
Accounting