USA Transferring personal a vehicle to company

[Jason Taylor]

I am transferring my personal truck to the business, yet will be having the company pay me installments for the vehicle.

So I debited the new asset account and credited the equity account.

As far as the repaying, how would I account for that? I need to set up a short term liability for $5,000, but what do I offset it with? The equity account?

Thank you.

 

[kirby]

Issue: you paid sales tax when you bought vehicle originally. When company buys it from you it will also have to pay sales tax

 

[Jason Taylor]

Good point. Thank you I will book my entry for that as well.

 

[DerrickWD]

For the original entry, I would have debited the truck for the fair value, credited short-term liability for $5000 and credited equity (owner's capital) for the difference between fair value and $5000.

I suppose debiting equity, crediting accounts payable after the fact would have the same effect.