711 Interest (Closed End Lease)
721 Interest (Open End Lease)
731 Interest (Rental)
Lease & Rental Activity
Direct Cost
Cost of Sales Synopsis
Accounts 711, 721, and 731, Interest for Closed End Lease, Open End Lease, and Rental vehicles, respectively, are established to record the Interest paid or payable for flooring Lease and Rental Vehicles while in service.
Debits |
Credits |
|
|
Example 1
Record the monthly amortization of the prepaid interest in the amount of $91.
Journal: Standard Entries Journal
Entry: |
|
Debit |
Credit |
Account 711 |
Direct Cost – Interest – Close End Lease |
$91 |
|
Account 312A |
Notes Payable – Lease & Rental Units – Prepaid Interest |
|
$91 |
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.