October 30, 2016 admin

Notes Payable—Recreation Vehicles

Liabilities and Net Worth

NOTES PAYABLE—RECREATION VEHICLES LIABILITY ACCOUNT
2020

ACCOUNT EXPLANATION
Principal amount of short-term notes payable to finance institutions and secured by new recreation vehicles in inventory.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Purchase of new motor home under floor plan agreement VP
    Inventory—Recreation Vehicles—New 1450
      Notes Payable—Recreation Vehicles 2020
             
  Payment of floor plan note on new recreation vehicle sold CD
    Notes Payable—Recreation Vehicles 2020
      Cash in Bank—General 1001
             
  Monthly accrual of wholesale floor plan interest on new recreation vehicles SE
    Recreation Vehicle Net Income 9000
      Accrued Interest 2421
COMMENTS
  • At month end, a listing should be made of the floor plan notes outstanding on new recreation vehicle inventory and the total reconciled with the balance in this account.
  • Interest charges on notes in this account should be recorded in Account 9000, Recreation Vehicle Net Income.
  • At the time a floor-planned vehicle is sold, the floor plan note should be paid off.