Accounting for Hire purchse installments

Can u anybody suggest, any method to acount for HP installments.Shall i need to create interest suspence account

Replies (3)

Read some books of Accounts(11or12th std)....

 

there are no. of entries need to be made.

Entry for Hire Purchase :-

(1) on purchase-

Assets A/c..................Dr (Hire purchase price)

        To Hire Vendor A/c (cash price of assets)

        To Intt. Suspense A/c(total of intt.)

(2) Entry for payment of HP installment :-

Hire Vendor A/c....................Dr.(cash prise in insttalment)

Intt. Suspense A/c...............Dr.(intt. in insttalment)

                   To Cash/Bank A/c(Total amount of insttalment)

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