535 Rental Income (Rental)

Lease & Rental Activity

 

Sales Synopsis

Account 535, Rental Income is established to record the receipts produced from the rental of vehicles to customers.

Debits

Credits

 

  1. The amount of money collected and accrued from customers in payment of rental vehicles operated by the dealership

  2. Amounts charged customers for insurance

  3. Amounts charged other Departments for the use of Rental Vehicles

 

Example 1

Record a cash sale of $37 for the $35 daily rental of a vehicle to a service customer and sales tax of $2.

Journal: Rental Sales

Entry:

 

Debit

Credit

Account 225

Cash Sales

$37

 

Account 535

Rental Income

 

$35

Account 324

Sales Taxes Payable

 

$2

Comments

Professional tax, accounting and insurance advice should be obtained regarding the establishment of a dealership owned rent a car operation.  Care must be taken to make sure that adequate and proper insurance coverage is in effect on all vehicles rented to customers.