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Chattel mortgage/Asset trade -in

Contributing Cover User samsteel
5 Posts
Contributing Cover User
Australia

Chattel mortgage/Asset trade -in

Good Evening

 

Could someone be so kind as to offer advice regarding a chattel mortgage posting in myob please?

 

we have purchased  new machinery under a chattel mortage but we have also done a trade-in of old machinery on this purchase.

 

Example:

 

Machinery at cost total $65,585

Trade - in value $18,000

Purchase invoice value $52,343.50 (inc GST)

 

finance total is $52,343.50

Interest on chattel mortgage $12,178

Total loan including GST and interest is $64,522.

 

How would i record this in MYOB? i understand how to record the chattel mortgage but it has confused me now that the trade-in is involved. Any advice would be much appreciated.

 

Thank you Smiley Happy

3 REPLIES
Ultimate Partner Seattle
1,104 Posts
Ultimate Partner
Australia

Re: Chattel mortgage/Asset trade -in

@samsteel

 

It is always best to discuss accounting treatment of car transactions with your Tax accountant.

 

The way I read your facts is to prepare the following Journal -

 

  Dr Machinery April 2017                     $65585

  Dr GST Paid                                           $6559

             Cr                       Trade - In April 2017        $18000

             Cr                       GST Collected                    $1800

Dr  Deferred Int Mach April 2017       $12178

            Cr     Finance Machinery April 2017            $64522

 

You may change the account names to suit.

 

Duncan

Duncan Smith
Business Advice + Tax
www.businessadviceplustax.com.au
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
Ultimate Partner ronatbas
3,158 Posts
Ultimate Partner
Australia

Re: Chattel mortgage/Asset trade -in

@samsteel

 

You may like to read through this blog of the other year. i doubt much has changed.

http://community.myob.com/t5/From-our-Business-Gurus/Capital-Purchases-and-Finance-in-AccountRight/b...

 

 

Ron B
BAS Group
03 95588477

info@basgroup.com.au
Making MYOB work for you
Ultimate Partner Seattle
1,104 Posts
Ultimate Partner
Australia

Re: Chattel mortgage/Asset trade -in

@samsteel @ronatbas

 

Further to Ron's comment, each time a BAS is lodged it is necessary to reconcile the GST Reports to the Balance Sheet.

 

Some Bookkeepers/BAS Agents would say never to post directly to the GST Collected or GST Paid accounts.

This may be relevant if you are using GST Reports solely as your determination of GST amounts (maybe MYOB can comment on the mechanics behind BASLink and whether it reconciles GST to the Balance Sheet ledgers).

 

Review of the Balance Sheet should be the starting point in preparing a BAS or Financial Reports.

 

Duncan 

Duncan Smith
Business Advice + Tax
www.businessadviceplustax.com.au
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
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