Purchases and Trade-in of Motor Vehicles

This paper gives the reader an understanding of how to correctly record the purchase of a motor vehicle. To make the transaction as real as possible, the example I use involves a deposit, a trade-in, financing, and payout of an existing loan. It covers how to do the transaction in such a way that the correct GST amounts will appear on your BAS if you need to claim an Input Tax Credit for the purchase of the vehicle. The procedures are equally applicable to other assets. My thanks go to Vija Platacis from Wizards in Effective Business Solutions Pty Ltd – a fellow Reckon Accredited Consultant – for her valuable comments and corrections.
See also Recording Loan Payments.

Purchases and Trade-in of Motor Vehicles