Can anyone please advise me how to post a new vehicle puchase on SAGE which has been financed by HP. I have posted the invoice to the puchase Ledger account splitting out the RFL and added the remaining cost to the FA register to depreciate. I need to clear the remaining balance and transfer this to the HP creditor account on the Balance sheet. Correct me if I am wrong. I am wondering how I get the split between capital and interest so i can get my management accounts correct with a portion of each monthly payment going to the P & L as interest. There is also a larger payment for the final installment, How do I deal with this. Any help would be appreciated.
I wouldnt post to the purchase ledger but instead post to the HP account.
To give example say you bought for £10000 payble over 60 months at £200 per month. This means that you will pay back £12000 so you interest will be £2000. Monthly split between capital and interest is £166.67 capital (£10k/60 payments) and £33.33 interest (£2k/60 payments).
Journals to incorporate would be
Dr Fixed Assets £10k
Cr Hire Purchase £10k
Say depreciation over 5 years straight line. Monthly journal would be
Dr Depn (P&L) £166.67
Cr Depn (BS) £166.67
Monthly journal to incorporate £200 HP payment would be
Dr HP (BS) £166.67 (this is the capital repayment each month)
Dr HP interest (P&L) £33.33 (this is the interest payment each month)
Cr Bank £200 (monthly HP payment)
Re the larger payment first payment the would just be a case of working out the capital/interest split of that first payment and allocate appropriately.
