October 30, 2016 admin

Service Loaner Expense—Parts

Expenses

SERVICE LOANER EXPENSE—PARTS EXPENSE ACCOUNT
7660

ACCOUNT EXPLANATION
That portion of total service loaner expense that is allocated to the parts department.

Service loaner expense is that portion of the total expense of leased or owned rental vehicles which can be allocated to service loaner usage—including monthly lease fees (or depreciation for dealership-owned vehicles), insurance, license fees, maintenance and repairs.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly lease payment to FRACS or LMDR for a vehicle in rental service which is also used as a service loaner (that portion which represents use as a service loaner; and portion of that amount which is allocated to the service department) SE
    Notes Payable—Rental Vehicles 7660
      Notes Payable—Rental Vehicles
Notes Payable—Long Term, Current Portion		 2540
2040
             
  Repairs to rental vehicle which is also used as a service loaner (portion which applies to service loaner usage and to the parts department) PS
    Service Loaner Expense—Parts 7660
      Sales—Parts—Internal—Parts
Sales—Service Labor—Internal		 5470
5730
COMMENTS
  • Subsidiary records should be kept to determine how many days each rental vehicle is in use as a service loaner. Refer to instructions provided by the Company for the Service Loaner program of record-keeping requirements.
  • Allocation of service loaner expense should be made on the basis of which department benefits from the service loaner program. If more than one department benefits, each department should bear a proportionate part of the service loaner expense.
  • The used vehicle department should bear a proportional part of service loaner expense if used vehicle purchasers benefit from the program.
  • Dealerships which use rental vehicles owned by the dealership (rather than leased vehicles) as service loaners should charge the appropriate portion of rental vehicle depreciation to this account. (See Section K for a breakdown of supplementary accounts for the rental vehicle portion of the business.)