USA JE for Asset sold to employee (making payments) who then defaulted on the loan.

[Collielynn]

I have a situation where a company truck (fully depreciated) was sold to an employee, who basically just took over the truck payments, then also charged him for taking over an established route at a trucking company.
The employee ended up quitting and defaulting on the loan. What do I do with the payments I did receive?

 

[kirby]

what entry did you make at sale? Then we can go from there.

 

[BIG E]

You are dealing with multiple related, but not directly connected transactions.
As the first poster noted - how did the business record the sale of the asset?
Then - how can they transfer title if a lender has a lien on it for the debt without the
lender being notified of the sale? And how about the insurance carrier?
Selling the route is a separate transaction that's a business sale, most likely an
installment sale of goodwill and other intangible assets. Was there legal agreement
signed by both parties?