B Com Exam > B Com Questions > On 1st april, 2013 the jindal traders ltd. to...
Start Learning for Free
On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries?
Most Upvoted Answer
On 1st april, 2013 the jindal traders ltd. took delivery of one truck ...
Journal Entries for Hire Purchase Agreement with Depreciation and Interest
Introduction:
In this question, we are given a scenario where Jindal Traders Ltd. has purchased a truck on hire purchase agreement from Hind Motors Ltd. The cash value of the truck on delivery was Rs. 16340, and the payment was to be made in three instalments of Rs. 6000 each on 31st March 2014, 2015 and 2016. The vendor charges interest at 5% per annum on the yearly balances, and the purchaser wrote off 25% on the diminishing value as depreciation for each year to 31st March.
Journal Entries:
There are two types of journal entries that need to be passed in this scenario. They are:
1. Journal Entries for the year of purchase:
a. Jindal Traders Ltd. A/c Dr. Rs. 16340
To Hind Motors Ltd. Rs. 16340
(Being the truck purchased on hire purchase agreement)
b. Hire Purchase Asset A/c Dr. Rs. 16340
To Jindal Traders Ltd. Rs. 16340
(Being the creation of Hire Purchase Asset)
2. Journal Entries for the year of payment:
a. Interest on Hire Purchase A/c Dr. Rs. 817
To Hind Motors Ltd. Rs. 817
(Being the interest charged on the yearly balances)
b. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the first instalment)
c. Depreciation A/c Dr. Rs. 4085
To Hire Purchase Asset A/c Rs. 4085
(Being the depreciation charged on the asset)
d. Interest on Hire Purchase A/c Dr. Rs. 768
To Hind Motors Ltd. Rs. 768
(Being the interest charged on the yearly balances)
e. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the second instalment)
f. Depreciation A/c Dr. Rs. 3064
To Hire Purchase Asset A/c Rs. 3064
(Being the depreciation charged on the asset)
g. Interest on Hire Purchase A/c Dr. Rs. 695
To Hind Motors Ltd. Rs. 695
(Being the interest charged on the yearly balances)
h. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the third instalment)
i. Depreciation A/c Dr. Rs. 2298
To Hire Purchase Asset A/c Rs. 2298
(Being the depreciation charged on the asset)
Explanation:
1. In the first entry, we record the purchase of the truck on hire purchase agreement.
2. In the second entry, we create a Hire Purchase Asset account to record the purchase of the truck.
3. In the third entry, we record the interest charged on the yearly balances.
4. In the fourth entry, we record the payment of the first instalment.
5. In the fifth entry, we record the depreciation charged on the asset for the first year.
6. In the sixth entry, we record the interest charged on the yearly balances.
7. In
Introduction:
In this question, we are given a scenario where Jindal Traders Ltd. has purchased a truck on hire purchase agreement from Hind Motors Ltd. The cash value of the truck on delivery was Rs. 16340, and the payment was to be made in three instalments of Rs. 6000 each on 31st March 2014, 2015 and 2016. The vendor charges interest at 5% per annum on the yearly balances, and the purchaser wrote off 25% on the diminishing value as depreciation for each year to 31st March.
Journal Entries:
There are two types of journal entries that need to be passed in this scenario. They are:
1. Journal Entries for the year of purchase:
a. Jindal Traders Ltd. A/c Dr. Rs. 16340
To Hind Motors Ltd. Rs. 16340
(Being the truck purchased on hire purchase agreement)
b. Hire Purchase Asset A/c Dr. Rs. 16340
To Jindal Traders Ltd. Rs. 16340
(Being the creation of Hire Purchase Asset)
2. Journal Entries for the year of payment:
a. Interest on Hire Purchase A/c Dr. Rs. 817
To Hind Motors Ltd. Rs. 817
(Being the interest charged on the yearly balances)
b. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the first instalment)
c. Depreciation A/c Dr. Rs. 4085
To Hire Purchase Asset A/c Rs. 4085
(Being the depreciation charged on the asset)
d. Interest on Hire Purchase A/c Dr. Rs. 768
To Hind Motors Ltd. Rs. 768
(Being the interest charged on the yearly balances)
e. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the second instalment)
f. Depreciation A/c Dr. Rs. 3064
To Hire Purchase Asset A/c Rs. 3064
(Being the depreciation charged on the asset)
g. Interest on Hire Purchase A/c Dr. Rs. 695
To Hind Motors Ltd. Rs. 695
(Being the interest charged on the yearly balances)
h. Hire Purchase Asset A/c Dr. Rs. 4500
To Jindal Traders Ltd. Rs. 4500
(Being the payment of the third instalment)
i. Depreciation A/c Dr. Rs. 2298
To Hire Purchase Asset A/c Rs. 2298
(Being the depreciation charged on the asset)
Explanation:
1. In the first entry, we record the purchase of the truck on hire purchase agreement.
2. In the second entry, we create a Hire Purchase Asset account to record the purchase of the truck.
3. In the third entry, we record the interest charged on the yearly balances.
4. In the fourth entry, we record the payment of the first instalment.
5. In the fifth entry, we record the depreciation charged on the asset for the first year.
6. In the sixth entry, we record the interest charged on the yearly balances.
7. In
Community Answer
On 1st april, 2013 the jindal traders ltd. took delivery of one truck ...
Interest 1st year RS 817
11nd year RS 558
111rd year RS 285
11nd year RS 558
111rd year RS 285
|
Explore Courses for B Com exam
|
|
Similar B Com Doubts
On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries?
Question Description
On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries?.
On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries?.
Solutions for On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? defined & explained in the simplest way possible. Besides giving the explanation of
On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries?, a detailed solution for On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? has been provided alongside types of On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? theory, EduRev gives you an
ample number of questions to practice On 1st april, 2013 the jindal traders ltd. took delivery of one truck from Hind Motors ltd. On hire purchase agreement, payable in three instalments of rs. 6000 each on 31 st march ,2014, 2015,2016. The cash value of the truck on delivery was rs. 16340 . Vendors charges interest at 5% per annum on the yearly balances . The purchaser wrote off 25%on the diminishing value as depreciation for each year to 31st march . Pass the necessary Journal entries? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup