Liabilities and Net Worth
| NOTES PAYABLE—USED VEHICLES (NON CERTIFIED) |
LIABILITY ACCOUNT |
| 2010 |
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ACCOUNT EXPLANATION
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| Principal amount of short term notes payable to finance institutions and secured by used vehicles (Non Certified) in inventory. |
TRANSACTIONS
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Jrnl. |
Dr. |
Cr. |
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Receipt of floor plan note from bank on used cars (Non Certified) |
|
CR |
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|
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|
Cash in Bank—General |
|
|
1001 |
|
|
|
|
Notes Payable—Used Vehicles (Non Certified) |
|
|
|
2010 |
|
|
|
|
|
|
|
|
|
Payment of floor plan note on used cars (Non Certified) |
|
CD |
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|
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|
Notes Payable—Used Vehicles (Non Certified) |
|
|
2010 |
|
|
|
|
Cash in Bank—General |
|
|
|
1001 |
|
COMMENTS
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- At month end, a listing should be made of the floor plan notes outstanding on used vehicles (Non Certified) and the total reconciled with the balance in this account. A column on the used vehicle inventory schedule may serve as this listing.
- Interest charges on notes in this account should be recorded in Account 7380, Interest—Floor Plan—Used.
- Interest accrued at month end on outstanding floor plan notes should be credited to Account 2421, Accrued Interest.
- At the time a floor-planned used vehicle is sold, the floor plan note should be paid off.
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