210 Notes Receivable

210 Notes Receivable - Customers

Assets

Receivables

Synopsis

Account 210 is established to record monies owed by customers who have signed promissory notes to the dealership.

Debits

Credits

The value of notes accepted from customers

The amount of Customer payments received
The amount of Notes considered uncollectible
The balances due on notes secured by vehicles which have been repossessed

Example 1

Record a sale of a used vehicle for $11,000 paid partly in cash ($1,500) with $11,175 financed by the dealership on an installment note, which included a finance charge of $1,000. The finance charge was considered earned at the time of sale. The sales tax is $550 and the Registration fees are $125. The inventory value is $9,750 of which $750 is due to Reconditioning.

Journal: Used Vehicle Sales

Entry:		Debit	Credit
Account 210	Notes Receivables – Customers	$11,175
Account 220A	Accounts Receivable – Customers – Vehicles	$1,500
Account 646A	Cost of Sales – Used Cars Retail – Certified	$9,000
Account 647A	Reconditioning – Cert. Used Cars	$750
Account 446A	Sales – Used Cars Retail – Certified		$11,000
Account 240	Inventory – Used Cars		$9,750
Account 324A	Sales Taxes Payable – Excise Taxes		$550
Account 808	Finance Income – Used		$1,000
Account 905	Other Income (Registration Fees)		$125

Example 2

Record a payment $350 received on the installment note.

Journal: Cash Receipts

Entry:		Debit	Credit
Account 201	Cash on Hand	$350
Account 210	Notes Receivables – Customers		$350

Comments

A debit balance represents the unpaid balances of notes accepted from customers.