A long-term capital gain occurs when you sell off a business asset that you have held for more than one year. Business assets can vary from equipment to stocks in another company. If you sell the asset before you have owned it for a year, you have a short-term capital gain. The long-term capital gain will post on your income statement to show the gain. On your balance sheet, you will see an elimination of the asset because it is now sold off and no longer on your balance sheet.
Find the asset's current worth on your balance sheet and find the sales price of the asset. For example, assume you sell a machine that is worth $100,000 on your balance sheet for $125,000. You held the machine for two years.
Debit "Cash" if you received cash at the time of the sale or "Accounts Receivable" if you have not received cash at the time of the sale. Either way, the amount should be the amount of the sale. This increases your "Cash" or "Accounts Receivable" account. In the example, debit "Cash" by "$125,000"
Credit "Long-term Asset" by the amount the asset is worth on the balance sheet. This removes the asset from your balance sheet. In the example, credit "Long-Term Asset" by $100,000.
Credit "Long-term Capital Gain" by the difference in the selling price and long-term asset's worth on the balance sheet. In the example, credit "Long-term Capital Gain" by $25,000. This records your capital gain.
This is one complete journal entry, so be sure debits equal credits.