Hire Purchase Double Entry
Prerequisites You are acquiring a motor vehicle that costs RM17500000 with a 5-year hire purchase plan. Hire Purchase is the agreement that seller allows buyer to purchase assets with installment rather than paid full amount.
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Transfer to Hire Purchase Creditor account.
. The purchase discount in this example is calculated as follows. Next pass a journal to transfer the amount from Contra bank account to your Hire Purchase Creditor account. To use the Goal Seek function go to the Data tab at the top of the Excel workbook and then into What-if Analysis and select Goal Seek.
5 61148 Hire Purchase double entry Hire Purchase double entry I am preparing the accounts for a client using his previous accountants bookkeeping. 5400 payment being made in four half-yearly instalments of Rs 1350 the first instalment being paid at the end of the first six. 4000 and the hire purchase price is Rs.
Because he has no money to pay so he pays per month hire charges. At or during the agreement period the underlying asset remains the lessors. You have put down a deposit down payment of RM7500000 which means.
Hire purchase HP or leasing is a type of asset finance that allows firms or individuals to possess and control an asset during an agreed term while paying rent or instalments covering. If the cash price was 7000 plus 1225 of VAT which was reclaimed as input tax the double entry is. Motor Vehicle ABC XXXX cost RM 23844600 Insurance RM 784235 Loan from Bank RM 200000 Loan from Director RM.
To vendor AC Second Method No entry 2. For the payment made for down payment First Method Vendor. The cash price is Rs.
CR BS HP Liabilities 7000. The double entry of this bill debits the Hire Purchase Current account and credit Accounts Payable or Bank account if Write Cheque is used instead of the Enter Bill. He has a HP agreement.
About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy Safety How YouTube works Test new features Press Copyright Contact us Creators. How to Record Hire Purchase Motor Vehicle. First Method Asset AC full cash priceDr.
The spot price is Rs 4000 and the hire purchase price is Rs 5400 with payment made in four semi-annual instalments of Rs 1350 with the first instalment paid at the end of. The buyer will make an initial down payment and pay the. The objective is to get cell E10 to show a.
Hire purchase agreements are essentially contracts in which the lessee pays for an asset in installments. Hire purchase is an agreement between two parties in which one party purchase any asset from other party. For the purchase of asset.
DR BS Motor Vehicles 7000. Otherwise your double entry works ok As a matter of interest if youre paying 108333 per month and the interest rate is 5 you start owing 67267 and over 72 months. Purchase price 1500 Purchase discount 2 Purchase discount Purchase price x Discount Purchase.
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