How to Book Insurance Proceeds in QuickBooks
You should create a journal entry to $0 out the balances in the loan account, the fixed asset account and the depreciation account. To balance the journal entry, you'll probably need an other revenue or expense account for the realized gain or loss.
Here's an example:
Fixed asset – $50,000
Depreciation – $25,000
Loan – $20,000
Insurance proceeds – $20,000 loan payoff + $10,000
In this case, you'd credit $50,000 to the fixed asset account and debit $25,000 to the depreciation account and $20,000 to the loan account to clear out those balances and also debit $10,000 to cash. The $5,000 credit difference would be booked to an other revenue account.
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