HP in CB?

Question asked by Anna Borkim 7 years ago

A bit of help needed, please... Simple situation but for some reason I'm getting confused. Machinery is bought on hire purchase (2 years of monthly payments and by the end of that period machinery belongs to company). Invoice (no VAT) from leasing company: Total rentals due 2000 Total fees due 190 Total payments due 2190

Accounting for that: debit fixed asset account 2000 debit fees, but where? which account? is it tax deductible? 190 credit leasing company 2190

can capital allowance be claimed on 2000?

any help will be much appreciate, thank you

Write reply2

2 Replies

Hi Anna,

I know we've resolved this via email, but for those that may be interested in how to process Hire Purchases, please see:

  1. Create a bill for the purchase price (including VAT) payable to the supplier.
  2. Mark the deposit being paid off on the bill.
  3. Create a new Hire Purchase loan account (Money > Bank Account > Add).
  4. Pay the remainder of the bill using the HP account.
  5. Class the monthly HP payments as transfers between your bank account and the new loan account.
  6. Post a monthly or annual adjustment for the interest element.

Tommy

Best answer
7 years ago

Job well done Tommy! Thank you again for your help

7 years ago

Reply to this question

Attach images by dragging and dropping or upload
 

Your comments will be public and can be answered by anyone in the Clear Books community.

Find out what we do and who we are

Apps

Company

Social