Accounting for Hire purchse installments

rama krishna (employee) (35 Points)

08 January 2009

Can u anybody suggest, any method to acount for HP installments.Shall i need to create interest suspence account

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Read some books of Accounts(11or12th std)....

there are no. of entries need to be made.

Rupesh Jha (M.Com CA PhD* and MBA*) (1116 Points)
Replied 24 April 2009

Entry for Hire Purchase :-

(1) on purchase-

Assets A/c..................Dr (Hire purchase price)

To Hire Vendor A/c (cash price of assets)

To Intt. Suspense A/c(total of intt.)

Rupesh Jha (M.Com CA PhD* and MBA*) (1116 Points)
Replied 24 April 2009

(2) Entry for payment of HP installment :-

Hire Vendor A/c....................Dr.(cash prise in insttalment)

Intt. Suspense A/c...............Dr.(intt. in insttalment)

To Cash/Bank A/c(Total amount of insttalment)

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