Record equipment trade in against Loan

Jeremy_9364289

We recently purchased a new piece of equipment under finance, but we also traded in an old machine to go towards the purchase.

I went to put in a journal for the purchase of the equipment like this:

Dr  Plant & Equipment     GST on capital purchase

Dr  Borrowing Costs        No GST

 Cr  new loan account           No GST

Cr  Plant & Equipment  (TRADE IN)   GST on Sales

However, Reckon wont let me put in both sales and purchase on a journal entry, comes up with an error.

How do I enter this transaction?

Im using Reckon accounts Hosted

John Gibson

Two options - use the GST code on both debit and credit, instead of CAG on purchase and GST on trade-in - should work.

Alternative for the Cr Plant & Equip assign with no code to Op Bal Equity, then 2nd entry Dr Op Bal Equity and Cr Plant & Equipment at cost account for the trade-in amount (with the GST code)

Jeremy_9364289

Thanks for your reply John,

It didn't prompt me when I did the GST on both, but when i tried to do NO tax code on the other lines, it gave me the error again.

John Gibson

Leave the others blank, with no code listed at all.....

Preece Mitchell

Preece Mitchell

A better way would be to do the journal entry for the purchase and leave out the trade in price and make the loan greater by this amount. Then do a separate journal entry to debit the loan account and credit the income account with the trade in. This way you can use one entry for CAG & another entry for GST.