I am stumped on a transaction I have to put through. It has a few different parts to it;
Firstly, when leasing a vehicle, the lease payments are an expense. But when you buy out the lease, I always assumed that the amount you bought out the lease for went towards an asset account, (in this case, 12,000). We paid 18,000 in lease payments to that point from 2002 to 2004, and bought out the lease on the truck in 2004 for 12,000.
My problem is twofold. The bookkeeper in 2004 put the purchase of 12,000 towards the lease expense account. I am not seriously concerned about this because the dep'n would bring 12,000 down to 200 after seven years. Basically everything would just balance out again, equalize, if you will. (Right? I'm typing all this to make sure I'm right!)
But now... the owner has sold the truck for $12,000. Does that mean I put all that $12,000 to Capital Gains From Sale of Assets? (It's an income type account). And I charge GST on that?
Any help on this quandry would be greatly appreciated.
Thanks!
Nomi >^,,^<
-- Edited by nomij on Monday 4th of May 2009 06:08:59 PM
