Accounting entry

Though the Second part of your query not clear (put clear detail)

Reply For,

1 ) Car Purchased by company against loan a/c entry :

Motor Car A/c - Dr - Rs.400000/-

 To X (Motor Car Co) - Rs.400000/-

2) X (Motor Car Co) - Rs.400000/-

     To Y (Loan Finance Co.) -Rs.350000/-

     To Cash -Rs.50000/-

As and when Company  start paying EMI to Y(Loan Finance co) entry :-

Y Finance Co.-  Rs.XXXXXX

To Bank - Rs.XXXXXX.

Clarify Second Part.

Motor Car    Dr   400000

Employee      Cr                                 100000(400000-300000)

Cash          Cr                                          50000

Loan          Cr                                        250000

No each year depreciation will be provided on the car by the company.  Now at the end of the 4^th year,  the car would be transferred to the employee for Rs.5000.  So the WDV of the car as at the end of the 4^th year would be arrived & the entries accordingly for the Profit/Loss on transfer of the car to the employee in the books of the company would be made.

In above entry Credit Balance gets created in account of Employee to the extent of Rs.100000/-.

I understand that employee's entitlement towards Motor car is Rs.300000/-  so entry can be like:-

Reduce from Motor Car A/c to Employees a/c to the extent of Rs.100000/-

1)Employee's A/c - Dr. --Rs.100000/-

 To Motor Car A/c- Rs.100000/-

2)Cash a/c  Dr-Rs.25000/-

 Bank A/c Dr.75000/-

    To  Employee's A/c - Rs.100000/-

3) Y (Loan  Finance Co.)- Rs.100000/-

    To Bank Rs.100000/-.

Further justification welcome