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If i have a discount of 10,000 for a trade in of my old car for a new car. The cost of the old car is 50,000 and the NBV is 12,000. I paid additional 60,000 for the new car.
What is the Profit/Loss on the trade-in transaction? and how do you record it in journal entry?You deal with the disposal exactly as normal, with proceeds of 10,000 (so a loss of 2,000).
You deal with the purchase of the new one exactly as normal, the cost is 70,000The only extra entry is for the trade-in itself, and is Dr Car 10,000 Cr Disposal account 10,000.
All the other entries are exactly as always.
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