How to record a trade in

[She11]

Hi, our business has bought a new van on a hire purchase agreement and traded in our old van to get some money off the new van. We were asked by the van company to send a VAT invoice to them from our business as if we have invoiced them for our old van and they bought it off us. Is that right?

I am totally confused as to how I record this in the accounts?

 

[Fair Price Accounting]

Here is a example
Original cost of old vehicle £17,000
Accumulated Depreciation £11,000
New Vehicle cost £30,000
Cash £25,000
Trade in allowance £5,000

Account Debit Credit
Fixed Assets 30,000 17,000
Accumulated Dep 11,000
Loss on Disposal 1000
Cash 25,000

 

[She11]

Thank you for replying but I'm still confused should I have raised an invoice for them for the sale of our van?

 

[Fair Price Accounting]

Has the dealer given you a invoice for the new van. This should contain all the details although there is no harm in creating a invoice if you wish