Record equipment trade in against Loan

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  • Updated 7 months ago
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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
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Jeremy

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Posted 2 years ago

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2 years ago
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John Gibson, Accredited Partner

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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)
2017-12-14T02:04:04+00:00
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Jeremy

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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.
2017-12-14T02:41:36+00:00
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John Gibson, Accredited Partner

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Leave the others blank, with no code listed at all.....
7 months ago
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Preece Mitchell

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Won't this throw out the BAS?
How can you use a GST code for a purchase!
7 months ago
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Preece Mitchell

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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.
(Edited)
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