Received compensation - how to do the journal for this trasaction

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siawfui
siawfui Registered Posts: 3 New contributor 🐸
in General accounting discussion
Hi

our company have purchased the new car for 36,000 inclusive VAT from the car factory, during the delivery, the transporter has crashed our car, car has been write off, transport company paid us the compensation for 39,250, no VAT element involve for the compensation, am I right?

can anyone tell me how to do the journal on Sage.

We have make a profit of 3,250 for the compensation, what is the journal for this.

Please help!

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  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    Credit Other income?
  • wannabebean
    wannabebean Registered Posts: 72 Regular contributor ⭐
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    I would imagine that this would be a GAIN ON DISPOSAL
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    That was my initial thought but if they never took delivery of the car in the first place then I wouldn't put it through the fixed asset accounts.
  • wannabebean
    wannabebean Registered Posts: 72 Regular contributor ⭐
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    Hmmm

    It depends then on who owns the car - or who owned it when it had it's mishap. If you never owned the car or took delivery of the car then you should not have claimed for the car. The delivery company or the car dealership should have claimed. If you have claimed, it MUST be your asset (or your company's) therefore....
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    A bit of 'substance over form' may be in point here..

    Actually, why did they not just send you another car?
  • wannabebean
    wannabebean Registered Posts: 72 Regular contributor ⭐
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    LOL :) Yes that would have worked even better! A very unsual situation.

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