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brendam24
September 19, 2025
Question

How to record auto insurance pay off for a total loss auto, and partial payment to the company?

  • September 19, 2025
  • 1 reply
  • 2 views

Our work truck got stolen a month ago and the auto carrier has deemed it a total loss. Now I need to know how to record this in QB online so it shows the truck has been paid off. The balance of the auto still owed to the bank is 47K which the insurance will send that amount directly to the bank. The total claim amount is 66K, so the remaining amount the insurance co. will send us a check directly for 19K . I  am having trouble understanding how to record this in QBO. 

1 reply

Rainflurry
Rainflurry
Level 11
September 21, 2025

@brendam24 

 

You need to remove the truck from the balance sheet as well as close the loan payable.  The info needed to make a complete entry are:

 

1) The original cost of the truck (the amount showing as a fixed asset on your balance sheet).

2) The amount of depreciation taken on the truck.

 

If you have no idea the amount of depreciation taken, make the following journal entry and let your accountant figure the depreciation and the resulting gain/loss from the disposal of the asset:

 DebitCredit
Bank Account 19,000 
Loan Payable (to close)47,000 
Ask My Accountant14,000 
    Truck (Fixed Asset to close) 80,000

 

If you know the amount of depreciation taken, then you can make a complete entry.  Let's take a truck that cost $80K and you took $20K in depreciation.  The journal entry to remove the truck and loan from your balance sheet is below.  You will most likely need to set up the Gain on Disposal of Asset - Other income account. 

 DebitCredit
Bank Account19,000 
Loan Payable (to close)47,000 
Accumulated Depreciation20,000 
     Truck (Fixed Asset to close) 80,000
     Gain on Disposal of Asset (Other income) 6,000

 

Let's say you have fully depreciated the truck.  Here's the journal entry for that scenario:

 DebitCredit
Bank Account19,000 
Loan Payable47,000 
Accumulated Depreciation80,000 
     Truck (Fixed Asset to close) 80,000
      Gain on Disposal of Asset (Other income) 66,000
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