514 Late Payment Charge (Closed End Lease)

524 Late Payment Charge (Open End Lease)

534 Late Payment Charge (Rental)

Lease & Rental Activity

 

Sales Synopsis

Accounts 514, 524 and 534, Late Payment Charges for Closed End Leases, Open End Leases and Rental vehicles, respectively, is established to record the amount of penalties assessed for Late Payments.

Debits

Credits

  1. The reversal or refund of a Late Payment Charge

 

  1. The amount of Late Payment Charges assessed to or collected from Lease and Rental Customers

 

Example 1

Record cash of $375 which includes a late payment charge of $25 on a Closed End Lease and $350 on the customer’s accounts receivable.

Journal: Cash Receipts

Entry:

 

Debit

Credit

Account 201

Cash on Hand

$375

 

Account 220C

Accounts Receivable – Customers – Closed End Lease

 

$350

Account 514

Late Payment Charge – Closed End Lease

 

$25

 

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.