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 |
|
|
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.