fixed asset purchased on installment basis

Evenif asset is purchased on Installment system book asset as its full cost in books and provide depreciation as per section 32 of IT Act

1. ON PURCHASE OF ASSET ON HIRE PURCHASE (AS ON THE DATE OF PURCHASE)

ASSET A/C   DR.

    TO VENDOR A/C 

2. ON PAYING DOWN PAYMENT (DATE OF PAYMENT)

VENDOR A/C     DR.

     TO BANK A/C

3. INTEREST CREDITED TO VENDOR A/C (ON DUE DATE OF INSTALLEMNT)

INTEREST A/C     DR

     TO VENDOR A/C

4. PAYMENT OF 1ST INSTALLMENT (ON PAYMENT OF INSTALLMENT)

VENDOR A/C       DR.

      TO BANK A/C

5. CHRGING OF DEPRECIATION ( ON THE DATE OF BALANCE SHEET)

DEPRECIATION A/C      DR.

         TO ASSET A/C

6. CHARGING OF DEPRECIATION AND INTEREST TO PROFIT AND LOSS A/C

PROFIT AND LOSS A/C     DR.

             TO DEPRECIATION A/C

             TO INTEREST A/C

(REPEAT LAST 4 TRANSACTIONS TILL THE PAYMENT OF LAST INSTALLMENT)