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

  1. The monthly provision for License fees, Title costs and Sales Tax for Lease and Rental Vehicles

 

 

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.