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Truck purchased through finance company

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(Querist)
20 August 2009 A rice sheller purchases a truck on finance in April 2008. The bill of the truck is Rs. 8 Lacs. It got it finaced from a finace compnay for three years. The amt to be paid to the finance of is Rs. 11 Lacs.
My queries are
1) How this transaction will be recorded in the books. The finance co. will be credited by Rs. 11 Lacs and Truck account will be debited by Rs. 8 Lacs. What will be the treatment of Rs. 3 Lacs? It will be credited to Interest Suspense a/c or any other a/c ? Where should it be shown in the balance sheet and with what name?

2) Depricication is to be charged on what amount and whether annual intt is to be calculated and charged to revenue?

3) The rice sheller uses it for its own business ie. to carry paddy, rice etc. Whether any income is to be shown from this truck separately ????

Please ans. as it is very very urgent.
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UMA SHANKER SHARDA

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UMA SHANKER SHARDA (Expert)
20 August 2009 already replied.
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