Notes Payable – New Vehicles & Demonstrators – Other Franchise

Liabilities and Net Worth

NOTES PAYABLE—NEW VEHICLES & DEMONSTRATORS—OTHER FRANCHISE	LIABILITY ACCOUNT
	2005

Principal amount of short term notes payable to finance institutions and secured by new vehicles and demonstrators in inventory.

Ford Credit Dealer EFT (DEFT)—Recommended Account Entries

			Jrnl.	Dr.	Cr.

Purchase on new vehicles under the floor plan agreement			VP
	Inventory—New Vehicles—Other Franchise			1305
	Receivable—Other			1130
		Notes Payable—New Vehicles & Demonstrators—Other Franchise			2005

Payment of floor plan note on new car sold			CD
	Notes Payable—New Vehicles & Demonstrators—Other Franchise			2005
	Installment Sale Balance			2050
		Cash in Bank—General			1001

At month-end, a listing should be made of the floor plan notes outstanding on new vehicles and the total reconciled with the balance in this account. A column on the new vehicle inventory schedule may serve as this listing.
Interest charges on notes in this account should be recorded in Account 7180, Interest—Floor Plan—New.
Interest accrued at month end on outstanding floor plan notes should be credited to Account 2421, Accrued Interest.
Notes payable on vehicles in Account 1720, Company Vehicles, should be recorded in Account 2520, Notes Payable—Other—Long Term. The portion of such notes that becomes payable within twelve months should be transferred to Account 2040, Notes Payable—Long Term—Current Portion.
At the time a floor-planned vehicle is sold or transferred, the floor plan note should be paid off.