What is the Journal Entry for Loss on Sale of Fixed Assets?

Journal Entry for Loss on Sale of Fixed Assets

Nowadays, businesses sell their assets as part of strategic decision-making. Reasons could vary from up-gradation to new better quality asset, arranging money for a business need, not in use asset etc. there could be any reason to sell an asset.

It is common that an asset may not be sold at its current book value if it is sold for more, it generates profit for the business and, in the situation opposite to that, it incurs a loss when it is sold for less.

Journal entry for loss on sale of fixed assets is shown on the debit side of profit and loss account.

There are 3 different accounts that will be affected by this

  1. The asset being sold
  2. The cash being received
  3. A loss incurred on the sale of an asset


Journal Entry for Loss on Sale of Fixed Assets

Cash A/C DebitReal AccountDebit what comes in
Loss on sale of asset DebitNominal AccountDebit all losses 
 To Sale of Asset CreditReal AccountCredit what goes out


Short Quiz for Self-Evaluation



>Read Journal Entry for Profit on Sale of Fixed Assets