Betty Bookkeeper gives advice on recording a vehicle purchased on HP – July 2014

Good day Betty 

How do I do the initial recording on Pastel if a vehicle is purchased on an HP contract?

Account debit – I think this will be the actual asset account? Or account credit? I’m not really sure what this should be.

Please advise?

Regards,
Christelle

 

Hi Christelle

Thank you very much for your great question, darling.

A vehicle on a hire purchase contract should be recorded as:

  • DR – Asset (original cost)
  • CR – Instalment Credit Loan
  • CR – Bank (if deposit is paid)

Hope that helps!

Don’t forget that I’m here to answer your questions about the ICBA, or just queries about your accounting at work. All you have to do is email me!