Accounting for hire purchase transaction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2011 respected sir/madam.
An asset has been purchased via hire purchase loan. kindly tell me what will be the ---
1)accounting entries to be passed in this case with relevane to AS-19 -accounting for lease.

2) Should the whole cost of asset be booked or only the cash payment made during the year.

3) depreciation will be provided on what(Cost of asset or amount paid till date).and,

4) Taxation effect

thank you

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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28 January 2011 whole cost of asset be booked, depreciation will be provided whole cash cost of asset and depreciation shall be allowed on hire purchase assets for taxation purpose