REGISTER HIRE PURCHASE

[KOLLONA]

Hy there,

basically this is the first time i use sage for the current financial year , what i need to do is to register this van which was purchased 2 years ago and has been paid in monthly instalments so far, so i need to put the original price less the depreciation? and where i need to register it, perhaps like hire purchase or fixed assets?? and how i record the monthly payments that need to reduce the balance of the original price plus the interests???

thanks

Xavier

[brucedenney]

It is rare to see HP nowadays, the preference seems to be to lease or contract hire.

You have three separate things going on with HP.

1/ You have an asset which is depreciating

2/ You have a loan which you are repaying

3/ You have interest on the loan which you are paying.

Each month, the van goes down in value as it gets older, you pay some interest and you pay part of the loan.

The Asset side is fairly standard, you can set this up just as you would for any other asset.

You can read all about it here.

http://sage.support.makingithappen.co.u ... record.htm

The outstanding loan is entered as a liability, you would normally create a loan account for each HP item, typically this would be 23XX

You would also create an interest account in the P&L 79XX

The payment each month would be split into 2 parts, the part that was interest going to 79XX and the part that is repayment of the loan going to 23XX

Full details of handling HP is in ssap 21
http://www.frc.org.uk/images/uploaded/d ... 0cover.pdf