[sledesma]

Hi I'm Sylvia.

I have worked my trade- In entries as follows

Debit Credit

Depreciation expense 320
Accumulated depreciation-Truck 320

Truck (new) 21780
Accumulated depreciation-Truck 16420
Truck (Old) 18000
Cash 20,200

The original problem was as follows: exchanged a truck that cost $18000, new truck costs $23000. Old truck had been depreciated through November of last year and the transaction took place on December of same year. Depreciation at a rate of $320 per month with a total through November of $16100. Received a trade-in allowance of $2800 on old truck. I paid the balance with a check and updated depreciation through December. I am stuck on the last transaction, which requires me to use three lines in the cash payments journal to to record the purchase?

Do I debit amount of new truck and credit cash? Then debit accumulated depreciation and credit cash? And last put the cost of the old truck in the general column in parenthesis to indicate the credit of the old truck and then credit cash? Please help I have gotten this far and have just confused myself.
:confused:

[morgaine300]

It isn't you who is confusing you.

Assuming you have 2 debits and 2 credits, in that order, your entry is correct. (If you were trying to do columns, they don't work here. You have to write Dr & Cr in front of everything.) This is also assuming you were actually supposed to catch up December's depreciation and that would depend on when in December it was sold. But you look like you know what you're doing, so I'll trust you on this.

What is confusing you is all these silly templates and telling you how many lines you have to have, etc. It makes me nuts. You know how to do the entry! And this isn't an easy entry. And they're just confusing things. I don't even understand the concept of putting an entry like this into a cash payments journal. So seriously, your guess is as good as mine. The columns of a cash payments journal are all debits, but you have to credit the truck. Sigh.

However, you seem to be stuck with it. So go with what you said. Your logic is sound. Except... I would just lump the cash for 20,000 on one line -- it doesn't have to be separated.