Generating General Journal Entries
The processing of the lease invoices will create different journal entries than the Dynamics Receivables scheduled payments. In the example below, a payment schedule has been created for a schedule amount of $10,000, 10% compound interest, 2 monthly payments, and a residual value of $1.00.
The invoicing for the first invoice will generate the following general journal entries:
| Account | Debit | Credit |
|---|---|---|
Accounts Receivable | $5,602.59 |
|
Financing Accounts Receivable |
| $5,602.59 |
Unearned Interest (Balance Sheet) | $83.33 |
|
Interest Income |
| $83.33 |
The invoicing routine for the second invoice will generate the following general journal entries:
| Account | Debit | Credit |
|---|---|---|
Accounts Receivable | $5,602.59 |
|
Financing Accounts Receivable |
| $5,602.59 |
Unearned Interest (Balance Sheet) | $41.84 |
|
Interest Income |
| $41.84 |
The processing of the lease will generate the following general journal entries:
| Account | Debit | Credit |
|---|---|---|
Financing Accounts Receivable | $10,125.15 |
|
Accounts Receivable |
| $10,125.15 |
Unearned Interest (Balance Sheet) |
| $125.15 |
The sale of the asset (assuming asset cost is $19,000) will generate the following general journal entries:
| Account | Debit | Credit |
|---|---|---|
Accounts Receivable | $10,000.00 |
|
Accumulated Receivable | $11,000.00 |
|
Unearned Interest (Balance Sheet) |
| $19,000.00 |
Interest Income |
| $2,000.00 |