Easiest thing to do is break down the various stages.
First need to record the asset
Dr P&M £16065.83
Dr VAT £3213.17
Cr HP £19279.00
Then need to record the payment on deposit
Dr HP £3702.52
Cr Bank £3702.52
As the deposit covers the HP means that you can reclaim the VAT when you pay deposit. The balance is an amount of £489.35 which is the monthly payment that you are making but will assume the 36 months starts the month after you make the deposit payment.
This leaves a balance of £15576.48 (£19279.00 - £3702.52) in the HP account which is being repaid at £489.35 for 36 months. Therefore you are paying back £17616.60 (36 x £489.35) which means you are paying £15576.48 HP capital and £2042.12 interest.
Spreading the capital of £15576.48 and £2042.12 interest over 36 months gives £432.68 capital (£15576.48/36) with the balance each month being interest £56.67 (£489.35 - £432.68).
This means each month out of the £489.35 payment £432.68 will go against the HP capital and £56.67 to HP interest in the P&L so by the end of the 36 months the HP balance will be cleared and the HP interest will have been fully expensed to the P&L.
