Part Exchange

System

Just Wondering If Theres Any Simple Help For Part Ex..

Just The Debit And Credit Journals And What Figures Go With Each...

For Example...
A New Car Bought For £10000, Old Car Bought For £8000, £3000 Accumulated Depreciation (NBV £5000), Given £2000 Part Exchange Value.

Could Anyone Give Me A Nice Simple Answer, Just With A Little Explanation To Where The Figures Come From And What Order Is The Best Way To Do It?

System

Re:Part Exchange

Fixed Asset (Car) Account has a debit balance of £8,000
Provision for depreciation (Car) has a credit balance of £3,000

Now the transaction
Debit disposal account £8,000
Credit Fixed Asset (Car) Account £8,000

DEbit Provision for depreciation (Car) £3,000
Credit disposal account £3,000

That gets rid of the old car
Then
Debit Fixed Asset (Car) Account £2,000
Credit disposal account £2,000

That's what we got for the old car
So
Debit Profit and Loss Account £3,000
Credit disposal account £3,000

for the loss on disposal

And
Debit Fixed Asset (Car) Account £8,000
Credit cash £8,000

for the balance we had to pay to buy the new car

System

Re:Part Exchange

So...

1.Debit Disposal Account £8,000
Credit Fixed Asset (Car) Account £8,000

2.Debit Provision For Depreciation (Car) £3,000
Credit Disposal Account £3,000

3.Debit Fixed Asset (Car) Account £2,000
Credit Disposal account £2,000

4.Debit Profit and Loss Account £3,000
Credit Disposal account £3,000

5.Debit Fixed Asset (Car) Account £8,000
Credit Cash £8,000

...Cool Thanks For The Help!