313 – Notes Payable – SSLP, Lease and Rental Vehicles

Current Liabilities

Accounts & Notes Payable

Synopsis

Account 313

Debits

Credits

  1. Payments on notes payable for SSLP, Lease and Rental Vehicles.

  2. Payments of depreciation (curtailment) amounts invoiced by the flooring institution.

 

  1. The principal amounts due finance institutions on notes or contracts secured by vehicles in lease, rental or SSLP service.

 

Remarks:

The use of this account is intended for those dealers engaged in SSLP, lease or rental programs.

Individual wholesale inventory finance notes and/or contracts should be paid off immediately upon sale or disposal of the vehicle.

This is a control account which should be supported by a schedule.  A detailed record of the unpaid balance amount due on each vehicle should be maintained in this subsidiary schedule.

When new vehicles are placed into service from dealer inventory, the finance liability should be transferred by general journal entry from New Vehicles and Demonstrators (Account 310) to this account.

Each month-end a supporting finance liability schedule should be prepared and be in agreement with this account balance.  Any variances should be located, their source determined, and proper disposition promptly made.

Note: