USA Construction Equipment Sale Journal Entry Help

[zplumbing]

How should I record the purchase of a vehicle, with a trade-in, loan payoff, down payment, and new financing?

New Equipment Price - $35,000

Trade-In Credit for Old Equipment - ($18,000)

Loan Payoff for Old Equipment - $10,882.55

Sales Tax - $1,620.00

Down Payment - ($1,802.55)

Total Amount Financed for New Equipment = $27,700

 

[Triest123]

Dr New equipment 35,000
Dr Loan for old equipment 10,882.55
Dr Sales Tax 1,620
Cr Trade in 18,000
Cr Bank 1,802.55 => down payment for new equipment
Cr Loan for new equipment 27,700
(To record the purchase of new equipment under the trade in of old equipment and loan financing)



Dr Trade in 18,000
Dr Accumulated depreciation
- old equipment
Cr Old equipment (at costs)
Dr loss on disposal OR Cr gain on disposal
(To record the disposal of old equipment)

 

[zplumbing]

Are you using the Sales Tax as an Expense Account? Also, what type of account is the Trade In Account?