512 Maintenance Income (Closed End Lease)
522 Maintenance Income (Open End Lease)
Lease & Rental Activity
Sales Synopsis
Account 512, Maintenance Income (Closed End Lease) and Account 522 (Open End Lease) are established to record the portion of the regular lease payment, which covers the vehicle maintenance of the lease vehicle.
Debits |
Credits |
|
|
Example 1
Record the accrual of $1,000 for maintenance income on closed end leases, $7,000 for recurring lease payments and $400 for sales tax. The total amount to be received is $8,400.
Journal: Standard Entries Journal
Entry: |
|
Debit |
Credit |
Account 220C |
Accounts Receivable – Customers – Closed End Lease |
$8,400 |
|
Account 511 |
Recurring Lease Payments – Closed End Lease |
|
$7,000 |
Account 512 |
Maintenance Income – Closed End Lease |
|
$1,000 |
Account 324 |
Sales Taxes Payable |
|
$400 |
Comments
This account only applies to lease vehicles, which are leased with maintenance coverage.
Note:
Transactions, which are related, should be recorded in separate sub-accounts. Sub-accounts serve to keep records organized for future analysis and auditing. The sub- accounts in these examples are designated by a letter following the account number (suffix). Please refer to your DSP's instructions for establishing sub-accounts.