714 License, Title & Tax (Closed End Lease)
724 License, Title & Tax (Open End Lease)
734 License, Title & Tax (Rental)
Lease & Rental Activity
Direct Cost
Cost of Sales Synopsis
Accounts 714, 724, and 734, License, Title & Tax for Closed End Lease, Open End Lease and Rental vehicles, respectively are established to record the cost of registering such vehicles with the state DMV.
Debits |
Credits |
|
|
Example 1
Record the $24,000 sale or transfer of a new vehicle from inventory to lease & rental service. The license, title and tax are $600. The inventory value is $22,000.
Journal: New Car Sales
Entry: |
|
Debit |
Credit |
Account 277 |
Lease & Rental Vehicles |
$22,200 |
|
Account 621 |
Cost of Sales – New Cars - Internal |
$22,000 |
|
Account 714 |
Direct Cost – License, Title & Tax |
$600 |
|
Account 231 |
Inventory – New Cars |
|
$22,000 |
Account 421 |
Sales – New Cars – Internal |
|
$22,200 |
Account 324A |
Sales Taxes Payable – Excise Taxes |
|
$600 |
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.