079 Interest - Notes Payable Other

079 Interest – Notes Payable Other

Expenses

Semi-Fixed

Synopsis

Account 079, Interest – Notes Payable Other is established to record the interest that is paid or payable on various bank or private loans granted to the dealership. Not included are interest charges for New or Used Vehicles financed on the dealership’s Floorplan line of credit, mortgages secured by dealership property, nor lease/rental vehicles.

Debits

Credits

Interest expense paid or accrued on obligations not secured by real estate mortgages, lease and rental units nor vehicle inventories

Example 1

Record the monthly payment of $4,714 for a loan that is due on the last day of the month. The amount of principal is $3,676 and the interest of $1,042 distributed to each department as shown in the example below.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 334	Long Term Debt	$3,676
Account 079-01	Interest – Notes Payable Other – New Vehicle Department	$219
Account 079-02	Interest – Notes Payable Other – Used Vehicle Department	$156
Account 079-03	Interest – Notes Payable Other – Lease & Rental Department	$21
Account 079-05	Interest – Notes Payable Other – Mechanical Department	$198
Account 079-06	Interest – Notes Payable Other – Body Shop Department	$104
Account 079-07	Interest – Notes Payable Other – Parts & Accessories Department	$188
Account 079-09	Interest – Notes Payable Other – General & Administrative	$156
Account 202	Cash in Bank		$4,718

Distribution of Expenses

	Departmental Distribution
079 Interest- Notes Payable Other	New Veh.	Used Veh.	Lease & Rental	Mechanical	Body Shop	Parts & Access.	Gen & Admin.
	01	02	03	05	06	07	09
Interest on other notes payable	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor
Interest on tax delinquencies	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor
Interest on Driver Training Vehicles	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor	Relative Value Factor
Interest on Company Vehicles	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited

Comments

Only the interest paid or payable on capital loans, or private loans is posted to this account. As monthly statements are received from lenders, an inspection should be done to make sure that the previous payment has been posted properly and that the correct amount of principal and interest has been credited. Discrepancies should be reconciled immediately.

Departmental Distribution