Dr Fixed asset additions £10k Dr input VAT £1.75k Cr HP liability £10k
as there is no interest and i assume the payments are straight line, when you get to your year end you will want to allocate £2.5k to HP liability 1 Year to reflect the short and long term liabilities.
You said VAT is payable I have assume you meant claimable and this is a purchase.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
Adi, shouldn't the HP creditor be £11.75k? I imagine Suri's company is paying the supplier the vat element up front, in which case the entry will be dr hp creditor and cr bank £1.75k. Very unusual for zero interest on HP????
no the HP cred should be the net amount as the VAT will be paid in the initial deposit (assuming what the OP said in the first post is accurate).
I have seem a fair few 0% HP agreements in the agricultural sector over the last 2 years or so. Get them the sale for large machinery that they might not have secured otherwise. This might start tailing off again as the economy picks up but who knows.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
