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

 

  1. The amount of payments received from and accrued for lease customers covering the maintenance of the lease vehicle

 

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.