This is very simple but I'm having trouble figuring out how to account for the sale of an asset, in double-entry bookkeeping, in a way that shows the net proceeds going to cash AND recorded as a capital gain.
Assume you have an asset worth $1000. When you sell the asset you enter a transaction that reduces the asset value to zero and increases your cash balance to $1000. What is the corresponding transaction that shows the capital gain? Clearly one side is an increase in an income account (Capital Gains) but where does the balancing entry go?
I found this question but it doesn't seem to address my simple situation.
Here's some detail:
Transaction Asset Cash CapGain ???? ================= ======== ======== ======== ======== Initial Balance 1000 Record Cap Gain -1000 +1000 Cash +1000 -1000 or expressed the other way Cash -1000 +1000 Record Cap Gain +1000 -1000