542 Accessories (Lease and Rental) – (Sales)
Lease & Rental Activity
F & I, Protection Plan Activity
Sales Synopsis
Account 542 is established to record the amount of Accessories sold on Lease and Rental vehicles.
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Debits |
Credits |
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742 Accessories (Lease and Rental) – (Cost of Sales)
Lease & Rental Activity
F & I, Protection Plan Activity
Cost of Sales Synopsis
Account 742 is established to record the Cost of Sales of Accessories sold on Lease and Rental vehicles in Account 542 above.
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Debits |
Credits |
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Example 1
Record the sale of a lease unit by the Lease & Rental Department that has had running boards installed by the customer’s request. The lease unit is sold for $24,000, plus $450 for the running boards and the sales tax is $1,223. The cost of the running boards is $300 and the cost of sale of the unit is $22,000.
Journal: New Car Sales
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Entry: |
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Debit |
Credit |
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Account 220C |
Accounts Receivable – Lease & Rental |
$24,450 |
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Account 710 |
Cost of Sales of Disposed Vehicles |
$22,000 |
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Account 714 |
Direct Cost – License, Title & Tax |
$1,223 |
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Account 742 |
Cost of Sales – Accessories - Lease & Rental Activity |
$300 |
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Account 277 |
Inventory – Lease & Rental Vehicles |
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$22,300 |
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Account 510 |
Selling Price of Disposed Vehicles |
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$24,000 |
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Account 542 |
Sales – Accessories – Lease & Rental Activity |
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$450 |
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Account 324A |
Sales Taxes Payable – Excise Taxes |
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$1,223 |
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.