how to write off damaged Asset and enter insurance payout

JaneW

how do I enter the proceeds of an insurance payout for a Backhoe that was written off as it was damaged by fire.
The equipment is entered as a fixed asset valued at $80,000
The insurance company paid out an amount of $50,000 to the company bank account.
how do i enter this payout and also write off the asset in the accounts?

Kris_Williams

I would do a cash sale and create an item linked to the Asset account, it will be up to the accountant to write off the balance. You need to know if the 50,000 included GST, because often the GST is deducted from the payout and paid to tax office, and tax code accordingly.