20 November 2023
◾ Administrative fees - 1116.65 SAR (Without 15% VAT value 971) ◾ Finance commission - 37896 SAR (No Vat) 🛑 Price of goods(VEHICHLE) - 121440 SAR (Without 15% VAT 10,5600 )
⭕TOTAL NET AMOUNT(WITHOUT 15% VAT) - 971+37896+105600 = 144,467 ⭕TOTAL VAT - 15,985 SAR
TOTAL PURCHASE INVOICE VALUE - 160,452.65 SAR
FINANCE DETAILS GIVEN BELOW
TENURE - 36 MONTHS DOWN PAYMENT - 24300 SAR Administrative fees - 1116.65 SAR 1st EMI - 3,843.35 SAR (EMI-3751 + 92.35 INTREST)
TOTAL - 29260 SAR PAID THROUGH BANK (DOWN PAYMENT+Administrative fees+1st EMI)
(INTREST VALUE NOT SAME FOR ALL MONTH,SO TOTAL EMI VALUE GIVEN BELOW)
09 July 2024
It seems like you need help with recording the car loan entry in your financial records. Based on the details provided, here’s how you can record it:
### 1. Purchase Invoice and VAT
- **Total Purchase Invoice Value:** 160,452.65 SAR
Since this includes VAT, you need to separate the net amount (excluding VAT) for proper accounting entries.
### 2. Finance Details and Payments
- **Tenure:** 36 months - **Down Payment:** 24,300 SAR - **Administrative Fees:** 1,116.65 SAR - **1st EMI:** 3,843.35 SAR (including principal and interest)
Total paid through bank initially: - **Total Payment:** 29,260 SAR (Down Payment + Administrative Fees + 1st EMI)
### 3. Interest Details
- **Total Interest Paid:** 2,732.40 SAR (this seems to be the total interest over the loan tenure, not per month)
### Accounting Entries
#### A. Initial Entry for Purchase
Assuming the vehicle purchase invoice: - Debit: Vehicle (Fixed Asset) Account - 144,467 SAR - Credit: Accounts Payable (or Bank if paid immediately) - 144,467 SAR
#### B. Recording Down Payment and Administrative Fees
- Debit: Vehicle (Fixed Asset) Account - 24,300 SAR (for Down Payment) - Debit: Administrative Fees Expense Account - 1,116.65 SAR - Credit: Bank Account - 25,416.65 SAR
#### C. Recording First EMI
Since the first EMI includes both principal repayment and interest:
- Debit: Vehicle (Fixed Asset) Account - 3,843.35 SAR (for principal repayment) - Debit: Interest Expense Account - 92.35 SAR (for interest component) - Credit: Bank Account - 3,843.35 SAR
#### D. Monthly EMI Entries
For subsequent EMIs, adjust based on the breakdown of principal and interest provided in each installment. Typically, each EMI payment will reduce the outstanding principal and incur interest.
- Debit: Vehicle (Fixed Asset) Account - Amount corresponding to principal repayment - Debit: Interest Expense Account - Amount corresponding to interest component - Credit: Bank Account - Total EMI amount
### Conclusion
Ensure to keep track of each installment’s breakdown into principal and interest components. This approach ensures accurate financial reporting and compliance with accounting standards. If you need specific guidance on how to calculate the principal and interest components for each EMI, you may refer to your loan amortization schedule or consult with your financial advisor or accountant.
CAclubindia
