289 Fixed Assets - Other

Assets

Fixed

Synopsis

Account 289 is established to record the acquisition costs of Other Fixed Assets purchased by the dealership and which cannot properly be recorded in any other account.

It is also used to collect the cost of fixed assets purchased but not yet placed into service as well as the cost of construction in process.  Once assets are put into service, the total cost of the assets should be put into the normal account classifications and depreciation should commence.

Debits

Credits

  1. The cost of Other Fixed Assets

  2. The cost of fixed assets purchased but not yet placed into service

  3. Construction costs accumulated for building and leasehold improvements not yet completed

 

  1. The cost of Other Fixed Assets when sold or otherwise disposed

  2. The cost of fixed assets accumulated in this account but now being placed into service

  3. The cost of building and leasehold improvements accumulated in this account but now placed into service

 

Example 1

Record the purchase of mobile office to be used as temporary used vehicle sales office.

Journal: Cash Disbursements

Entry:

 

Debit

Credit

Account 289

Other Fixed Assets

$16,942

 

Account 202

Cash in Bank

 

$16,942

Example 2

Move the cost of construction in process and fixed assets purchased but not yet put into service to the permanent accounts.  (Construction completed and fixed assets placed into service).

Journal: General Journal

Entry:

 

Debit

Credit

Account 286

Leaseholds

$128,589

 

Account 284

Furniture & Fixtures

$63,128

 

Account 289

Other Fixed Assets

 

$191,717

Note:

ONLY ASSETS USED IN THE OPERATION OF THE DEALERSHIP BUSINESS SHOULD BE INCLUDED IN THESE ACCOUNTS.

 

Cost of assets should include additional items such as:

 

  1. Expenses incidental to securing title
  2. Installation and construction costs, including interest during construction
  3. Accessories and optional equipment
  4. Freight
  5. Sales Tax