What is the journal entry for sale of a fixed asset, including payoff of a mortgage loan and net gain on the transaction? Assets are recorded on the balance sheet at cost, meaning that all costs to purchase the asset and to prepare the asset for operation should be included.Recognize that a business can borrow to purchase assets using an installment loan. Should I use a Journal entry again and get rid of the asset and diminish my Loan to 0 and only then dispose the Fixed asset? When you sell merchandise, should the sale be recorded in cash or account? Check out the article below to know how to decide with examples. Fixed assets represent a significant capital investment, so it's critical the accounting be applied correctly. All Business Areas of the University permitted to engaged in activities that generate retail sales must collect and remit Pennsylvania sales or use taxes.