544 Other Protection Plans (Sales)

Lease & Rental Activity

F & I, Protection Plan Activity

Sales Synopsis

Account 544 is established to record the Sales of non-GM protection plans on Lease and Rental vehicles.

Debits

Credits

 

  1. The selling price of non-GM Protection Plans sold on Lease and Rental vehicles

 

744 Other Protection Plans (Cost of Sales)

Lease & Rental Activity

F & I, Protection Plan Activity

Cost of Sales Synopsis

Account 744 is established to record the Cost of Sales of non-GM protection plans on Lease and Rental vehicles.

Debits

Credits

  1. The Cost of Sales of non-GM Protection Plans sold on Lease and Rental vehicles

 

 

 

Example 1

Record the sale of $1,500 for a non-GM extended warranty sold on a leased vehicle sold.  The cost of the non-GM extended warranty is $750.

Journal: New Car Sales

Entry:

 

Debit

Credit

Account 220C

Accounts Receivable – Customers – Closed End Lease

$1,500

 

Account 744

Cost of Sales – Other Protection Plans – Lease & Rental Activity

$750

 

Account 544

Sales – Other Protection Plans – Lease & Rental Activity

 

$1,500

Account 300

Accounts Payable – Trade Creditors

 

$750

 

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.