New Vehicle at Cost Journal

[mango]

Hi All,

We bought a new Vehicle (passenger) for the company.

I just need to know the correct way to post the initial journal to record the purchase. We paid a Deposit and the rest will be on installment sale creditor.

This is what i though (please correct me if i'm wrong).

Dr Vehicles @ cost R303 000
Cr Installment sale Creditor R303 000

Dr Installment Sale creditor R 60 600 (the deposit)
Cr Bank R 60 600



Then Monthly
Dr Installment sale creditor R 5 500
Cr Bank R 5 500


Please tell me f this is correct ( i have never posted such a journal) i was told not VAT implications as its a passengers vehicle (The R303 000 includes everything).

Any help would be good.

Regards

[mango]

Good day,

Anyone here that can assist me please? We have our year end and i need to post the correct journal for this.

Regards

[Andromeda]

You have it exactly right Mango

[Companyservices]

Hi Mango,

It seems you have neglected the interest effect on the purchase of your vehicle. At year end you will have to journalise out the interest and expense it as none of your journals show the interest effect of the instalment.

Hope this makes sense.

Companyservices

[mango]

Hi Companyservices,

You are so right... but i saw the previous years they got the years interest from the bank and journalled it out on the last day of the year. Im happy with
this as the rates goes up and down and a few journals at year end isn't to much work :-)