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 |