Vehicle lease payments - what category?

Accounting
1

Hi,

Can anyone give any guidance on which category to post vehicle lease payments to?

Thanks
Simon

2

Is it HP or operating lease?

3

It is HP payment. A new van purchased via a HP agreement.

4

You must have booked an asset subject to depreciation under code 0050 Motor Vehicles and HP loan under code 2310 Hire Purchase. If you know ho much is interest payment on monthly basis out of your total payment then you can tag interest amount to code 7904 H.P. Interest and capital amount to code 2310 Hire Purchase.

Or tag all monthly payments to code 2310 Hire Purchase and end of year do a journal to transfer HP interest from code 2310 Hire Purchase to code 7904 H.P. Interest

5

What if it’s a finance lease, i.e. pay 3 months’ rental as initial payment then monthly rentals for 35 payments? Not lease purchase as the vehicle belongs to the leasing company.