October 30, 2016 admin

Leased Vehicles—Accumulated Depreciation

Assets

LEASED VEHICLES—ACCUMULATED DEPRECIATION ASSET ACCOUNT
1620

ACCOUNT EXPLANATION
Accumulated depreciation of units in leased vehicle inventory.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly provision for depreciation on leased vehicles in inventory SE
    Leased Vehicle Net Income 5300
      Accumulated Depreciation—Leased Vehicles 1620
             
  Leased vehicle removed from leasing service, transferred to used car inventory at a gain (represented by the excess of wholesale value, less estimated reconditioning, over net book value) G
    Inventory—Used Cars (at wholesale value less estimated reconditioning) 1350
    Accumulated Depreciation—Leased Vehicles 1620
      Leased Vehicles 1610
      Leased Vehicle Net Income 5300
COMMENTS
  • Useful lives of vehicles vary according to the type of vehicle, use, and other factors. Guidelines issued by federal tax authorities contain allowable methods and rates of depreciation. Tax counsel should be consulted before adopting depreciation methods and rates.
  • Account 5300, Leased Vehicle Net Income, is a control account to which leased vehicle income and expenses are charged. Supporting subsidiary income and expense accounts are described in Vehicle Leasing and Rental.