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I work for a non profit. We traded in a fully depreciated

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I work for a non...
I work for a non profit. We traded in a fully depreciated vehicle for a leased vehicle (closed end lease) What is the journal entry to record that transaction. The trade in value was used to offset the amount due at lease signing.
Submitted: 1 year ago.Category: Tax
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8/22/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Accumulated Depreciation (vehicle ) $xx,xxx (debit)

Vehicle $xx,xxx (credit)

Lease signing costs $x,xxx (debit)

Gain of disposal of vehicle $x,xxx (credit)

You would want to break out the lease signing costs into the various expenses.

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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

I am assuming that the lease would be considered an operating lease and at the end of the lease agreement the vehicle would be returned to the leasor.

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