October 30, 2016 admin

Notes Payable—Leased Vehicles

Liabilities and Net Worth

NOTES PAYABLE—LEASED VEHICLES	LIABILITY ACCOUNT
	2530

ACCOUNT EXPLANATION
TRANSACTIONS
COMMENTS

ACCOUNT EXPLANATION

Principal amount due to finance institutions on notes payable secured by vehicles in leasing service.

TRANSACTIONS

					Jrnl.	Dr.	Cr.

	Loan from finance company—secured by leased vehicles				CR
		Cash in Bank—General				1001
			Notes Payable—Leased Vehicles				2530

	Payment of monthly installment on note with interest				CD
		Notes Payable—Leased Vehicles				2530
		Leased Vehicle Net Income				5300
			Cash in Bank—General				1001

COMMENTS

Subsidiary records should support this account.
At month end, a listing should be made of all unpaid notes on leased vehicles and the total reconciled with the balance in this account.
Interest not paid on a monthly basis should be accrued monthly as a debit to Account 5300, Leased Vehicle Net Income, and a credit to Account 2421, Accrued Interest.
Further details on leasing operations are contained in Vehicle Leasing and Rental.