Car purchase through Hypothication
This query is : Resolved
11 August 2010
kindly guide for accounting entry for car purchase through Hypothication
11 August 2010
Since Hypothecation is just a lien over an asset agreed upon as a security towards the purchase of the car,the accounting treatment may not be affected because of its presence.More expert opinion is solicited.
11 August 2010
Yes except the fact the loan amount will be shown under Secured Loans.Accounting entries;
CAR A/C X
TO DEALER X
DEALER A/C X
TO ABC BANK LOAN A/C Y(LOAN AMOUNT)
TO CASH/BANK(PAID FROM YOUR OWN END)
WHEN EMI PAID
ANC BANK LOAN A/C (PRINCIPAL AMOUNT)
INTEREST ON CAR LOAN(INTEREST AMOUNT)
TO BANK A/C (EMI AMOUNT)
CAR A/C X
TO DEALER X
DEALER A/C X
TO ABC BANK LOAN A/C Y(LOAN AMOUNT)
TO CASH/BANK(PAID FROM YOUR OWN END)
WHEN EMI PAID
ANC BANK LOAN A/C (PRINCIPAL AMOUNT)
INTEREST ON CAR LOAN(INTEREST AMOUNT)
TO BANK A/C (EMI AMOUNT)
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11 August 2010
Thanks for your prompt reply. There is loan Principal amount & Interest JV & down payment which we had paid etc....
11 August 2010
i think u should disclose on the face of the accounts or in the notes to accounts regarding this hypothication
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