Asset Sale by Installment Payments

This article will show you how to sell a rental asset and bill your customer in installments. In the example below, you will have five contracts for installments and a sixth to make the final adjustments to the rental income and asset sale income. Regardless of the number of installments, there will always be one additional contract to show the final sale.


Topics included in this article

• Asset Sale by Installment
• Asset Sale Value
• Rental Revenue
• How will an Asset Sale affect your books?

Here's how to get there
Expert: Program Menu > Counter System > New Contract > Normal
Elite: Transactions > Normal

Asset Sale by Installment
 

1.  Write a rental contract or reservation for the length of the rental. In this example, we will use five months.
 

2.  Select the rental item and set the special rate for what you will collect monthly ($1000).
 

3.  Be sure to clearly state your terms on the comment tab of the contract.

a.  All rental fees will be applied to the sale of the unit. Payments will be made over 5 months. The final sale price will be $5000.

b.  80% of rental fees will be applied to the sale of the unit. Payments will be made over 5 months. The final sale price will be $5000 with a $1000 buyout.
 

4.  Go to the task list and set a reminder to yourself or someone else that the 5^th month is the last month of billing.
 

5.  Use continuation billing for the following 5 months as you normally would. This will generate a monthly billing of $1000.
 

6.  After the 5th-month billing cycle, bill it 1 more time (in this case, the 6th month). The customer may not see this contract (unless there is a balance due). This is an adjusting contract to lower rental income by way of credit for the previously paid rental amounts and selling the asset. 

Asset Sale Value
 

If you prefer to discount the Asset Sale Value
 

1.  Modify Contract.
 

Note: If you have a percentage item linked to the rental item, you will need to remove the percentage item before selling the asset. Go to File Maintenance, bring up a rental item, options tab, linked item, remove.
 

2.  Close the rental item to be sold and zero out the rental value for this contract.
 

3.  Right-click on the rental item and select Asset Sale.
 

4.  Enter the sale price, then the serial number.
 

5.  Enter the percentage of the rental billed to be applied to the sale of the item. This will discount the Asset Sale value.

Rental Revenue
 

If you prefer to discount the Rental Revenue instead of the Asset Sale Value
 

1. Make an asset sale.
 

Note: If you have a percentage item linked to the rental item, you will need to remove the percentage item before selling the asset. Go to File Maintenance, bring up a rental item, options tab, linked item, remove.

2. Add the item back to the contract.
 

3.  When it prompts for a quantity type Shift “N” for negative and press enter. Enter a quantity of -1 (negative -1).
 

4.  Double click the status field and enter C for the close.
 

5.  Change each price to the total amount to be credited from the previously paid rent ($5000). This will reduce the rent value.

6. Make sure to zero out each field for the rental amount.
 

7.  This contract will lower the rental income by the amount you are applying to the sale of the unit. It will also remove the item from your inventory by way of the asset sale. Below is a snapshot of the final contract.

How will an Asset Sale affect your books?
 

• If you make an asset sale it WILL lower your inventory value.

•  A general ledger entry WILL BE made for the asset sale.

• The item record WILL reduce in quantity by the quantity sold.

  • This can be seen within the purchase line as a sold amount within the purchase tab.

Related articles

Asset Sale
Sold Asset Report 
Sending out the Asset Sale Quote