Disposal

There are only 3 entries to be made in a disposal a/c.

1 - transfer the debit balance from Fixed Assets at cost a/c to Disposal a/c

2 - transfer the credit balance from Accumulated Depreciation a/c to Disposal a/c

3- Credit Disposal a/c with Sale proceeds and Debit it either in

.................................................. ..........................................a) Bank if cash received
.................................................. ..........................................b) Fixed Asset a/c if payment for part exchange
.................................................. ..........................................c) Sundry creditor if payment against outstanding invoice.

The journals you need to do is what I have mention above!

1) Debit DISPOSAL a/c with cost say...........£10,000
...Credit Motor Vechicle a/c at cost..............................£10,000

2) Debit MV Accumulated dep a/c say...........£ 6,500
...Credit DISPOSAL a/c...............................................£6 ,500

3) Debit MV @ Cost with Part X value say £2,500.............................IF balance of new car Debited to MV at Cost a/c
Credit DISPOSAL with.............................................. £2,500

OR

) Debit Sundry Creditors with Part X value say £2,500.............................IF Full value new car Debited to MV at Cost a/c
Credit DISPOSAL with.............................................. £2,500