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Thread: New Tractor purchased on HP: Posting it correctly on Pastel

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    New Tractor purchased on HP: Posting it correctly on Pastel

    I recently bought a new Tractor through finance.
    Could someone perhaps guide me with the right entries on pastel.

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    Silver Member Christel's Avatar
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    Hello Jausmu,
    I'm copying from a previous thread - this was posted by Neville: The question was how to capture a bakkie that was sold & how to add a new HP. Hope this helps!

    With regard to the bakkie that you sold, you should ideally process a tax invoice to the buyer, and allocate the proceeds to a GL account named "Profit / Loss on Sale of Assets" in your income statement, using VAT code 05. Then process the following general journal (with no VAT code):

    • Debit "Instalment Sales" with the settlement value
      Credit "Profit / Loss on Sale of Assets" with the settlement value
    • Debit "Accumulated Depreciation - Motor Vehicles" with the accumulated value of the depreciation of the bakkie
      Credit "Profit / Loss on Sale of Assets" with the accumulated value of the depreciation of the bakkie
    • Debit "Profit / Loss on Sale of Assets" with the original cost of the bakkie
      Credit "Motor Vehicles @ Cost" with the original cost of the bakkie



    With regard to the new acquisitions, process a general journal as follows:

    • The first line should credit "Instalment Sales" with the cost of the vehicle (and any VATable extras), using the VAT code 05 and debit "Motor Vehicles @ Cost" by using the contra amount column
    • The second line should credit "Instalment Sales" with the documentation fees, using the VAT code 01 and debit "Bank Charges" by using the contra amount column
    • The third line should credit "Instalment Sales" with any non-VATable charges (such as registration and licencing fees), using the VAT code 00 and debit "Motor Vehicles @ Cost" by using the contra amount column
    • The fourth line should credit "Instalment Sales" with the total finance charges payable, using the VAT code 00 and debit "Finance Charges in Advance" in the balance sheet by using the contra amount column
    always fear when Christel is near....

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