Asset Purchase Journal Entry is a financial record that registers changes in the value of assets due to the acquisition or disposal of such assets. This type of journal entry records the removal of the asset from the buyer’s balance sheet, as well as any associated liabilities, under an exchange of cash or equity for the asset. It also documents the addition of the asset to the seller’s balance sheet, along with any new liabilities resulting from the purchase. When used correctly, an Asset Purchase Journal Entry provides an accurate reflection of a company’s financial status and allows for precise reporting.