How to calculate depreciation of loaned vehicle

For Depreciation, you have to show on asset side as 2,00,000-Depreciation and loan amout should be shown on the liability side of the balance sheet.

Journal entries can be,

Vehicle  a/c Dr.    2,00,000

To Cash                                     50,000

To Party                                   1,50,000

For Depreciation:

Depreciation A/c Dr.

To Vehicle

Thank you very much. This was the answer I was seeking. But can you please tell to which group will Party to which further loan amount is to be paid, falls. I mean, unsecured loan or creditors or else

If the vehicle is mortgaged to the party then payable to party is a secured loan else its an unsecured loan.

Originally posted by : Sachin Rastogi
	If the vehicle is mortgaged to the party then payable to party is a secured loan else its an unsecured loan.

 Agree to Sachin.....

It will be a secured loan only as till the payment of last instalment, ownership lies in the hand of the Vendor. So in my opinion treat the same as secured loan.