Insurance payout on totaled vehicle

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We had company vehicle that was totaled in an accident. We bought it used, paid $10,000. The insurance payout was $30,000. How do I enter this payment? what else do I need to know in this case with such a difference in amounts? TIA

QuickBooks Online

Rainflurry

Level 11

@Keystone527

Did you take depreciation on the vehicle? If not, and you should have, you will need to contact your CPA/tax accountant. If you purchased the vehicle and wrecked it in the same fiscal year (FY), create a journal entry as shown below. The $20K difference is income. Again, this only applies if you purchased and wrecked the vehicle in the same FY.

	Debit	Credit
Cash	30,000
Vehicle (to close)		10,000
Gain on disposition of vehicle (other income)		20,000

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