Need some help on how to put this through SAGE....
The guys have two companies, A & B... (A) they are wanting to close down but it has such a big unpaid overdraft they have to wait until it is cleared. Their credit cards are assigned to company (A) and thus those transactions have to be assigned to that company. Basically they have bought a commercial vehicle for company (B) but have been paying for it all over the place...
Cost of vehicle £8995.00
VAT @ 17.5% = £1574.13
12 months reg fee = £200.00 (no VAT on this portion)
Total to pay = £10769.13
Thus far they have paid as follows:-
£250.00 deposit on the C/Card (i.e. company A)
£1524.13 cash balance due - which was paid by bank transfer from company B
The company owner then set up a loan agreement for the total amount of £10769.13 and has paid :- £452.64 first month's installment paid by cheque from company B
£259.59 second month's installment paid by cheque from company B
They have promised me that all future payments will go through company B
Please help!
The accountant said I should DR the vehicle account with the total and CR the loan account with the total... but what do I do with the £1524.13 that's already been paid?
-- Edited by LegibleBooks on Monday 16th of August 2010 03:00:55 PM
-- Edited by LegibleBooks on Monday 16th of August 2010 03:01:25 PM
I would put anything paid by Co B to the vehicle account (and VAT account) directly and then only CR a loan account with the amount paid by Co A. ie the deposit.
You do not confirm that the loan is under Co B? What type of loan is it? HP? If HP, you will need to account for the interest to be paid also.
All payments from Co B should be allocated as per normal.
Sorry it is all a bit of a muddle to say the least!
Co A has only paid the £250.00 towards the vehicle, all the rest has come out of Co B.
The loan (HP agreement) has been set up by the company owner in his own capacity. He has then been "drawing" cheques in lieu of the money coming out of his personal bank account for the monthly payments.
So 1524.13 paid by Co B to vehicle account 250.00 loan account for Co A (CR) to vehicle account (DR) 8995.00 loan account for Director (CR) to vehicle account (DR)
I would post the chq payments to the Directors loan account for Co B. There will be a problem with interest later!!
if your still unsure, send an email to the accountants and ask them to draft the journals, it'll take them a few minutes and i doubt they would charge it seperatly but you could ask.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
