October 30, 2016 admin

Notes Payable – Remarketed Vehicles

Liabilities and Net Worth

NOTES PAYABLE—REMARKETED VEHICLES LIABILITY ACCOUNT
2015

ACCOUNT EXPLANATION
Principal amount of short term notes payable to finance institutions and secured by remarketed vehicles in inventory.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Purchase of remarketed vehicles under floor plan agreement VP
    Inventory—Remarketed Cars 1355
1365
      Notes Payable—Remarketed Vehicles 2015
             
  Payment of floor plan note on remarketed vehicle sold CD
    Notes Payable—Remarketed Vehicles 2015
    Installment Sale Balance   2050  
      Cash in Bank—General 1001
COMMENTS
  • Remarketed vehicles are used Ford Motor Company vehicles sold to Ford and Lincoln Mercury dealers at closed auction. (i.e. Fleet repurchase vehicles, Ford Company Sales Vehicles, etc.)
  • At month-end, a listing should be made of the floor plan notes outstanding on remarketed vehicles and the total reconciled with the balance in this account. A column on the remarketed 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 remarketed vehicle is sold the floor plan note should be paid off.