Van costs £10,000 + VAT for eg . I have paid the VAT upfront but have the van on HP payments over 4 years . Do i just account for this like a normal purchase and then each month log a payment against
You need to book van as an asset under 0050Motor Vehicles and liability under 2310Hire Purchase, tag monthly HP payments to 2310Hire Purchase, yearly journal would have HP interest accounted for as well
Example entries would be
Dr 0050 Motor van £10,000
Dr Vat a/c £2000
Cr 2310 Hire purchase £12,000
How can you split the monthly HP payments into interest and principal as I won’t to account for the interest using the rule of 78