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X purchased a machine on hire purchased system. The total cash price of the machine is 31,960.down payment 8,000and three instalments of 12,000,10,000,4,000 payable at the end of the first, second and third year's respectively. Interest is charged 5% p. a. Charge depreciation at 10% on straight line method. Prepare ledger accounts in the books of x.?
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X purchased a machine on hire purchased system. The total cash price o...
Ledger Accounts in the Books of X

Cash Account:

Debit | Credit
----- | ------
To X's Capital Account | 8,000
To Bank Account | 23,960

Machinery Account:

Debit | Credit
----- | ------
To Cash Account | 31,960
To Depreciation Account | 3,196

Hire Purchase Account:

Debit | Credit
----- | ------
To Machinery Account | 31,960
To Interest Account (1st year) | 1,598
To Hire Purchase Interest Suspense Account (1st year) | 1,598
To Bank Account (1st installment) | 12,000
To Interest Account (2nd year) | 1,398
To Hire Purchase Interest Suspense Account (2nd year) | 1,398
To Bank Account (2nd installment) | 10,000
To Interest Account (3rd year) | 560
To Hire Purchase Interest Suspense Account (3rd year) | 560
To Bank Account (3rd installment) | 4,000

Depreciation Account:

Debit | Credit
----- | ------
To Machinery Account | 3,196

Interest Account:

Debit | Credit
----- | ------
To Hire Purchase Account (1st year) | 1,598
To Hire Purchase Account (2nd year) | 1,398
To Hire Purchase Account (3rd year) | 560

Hire Purchase Interest Suspense Account:

Debit | Credit
----- | ------
To Hire Purchase Account (1st year) | 1,598
To Hire Purchase Account (2nd year) | 1,398
To Hire Purchase Account (3rd year) | 560

Explanation:

Cash Account:

The cash account is debited with the down payment of 8,000 and credited with the remaining amount of 23,960, which is paid to the seller through a bank account.

Machinery Account:

The machinery account is debited with the total cash price of the machine, which is 31,960. It is also debited with depreciation at 10% on the straight-line method, which amounts to 3,196.

Hire Purchase Account:

The hire purchase account is credited with the total cost of the machinery, which is 31,960. It is debited with the interest charged on the hire purchase system for the first, second, and third year, which amounts to 1,598, 1,398, and 560, respectively. The hire purchase account is also debited with each installment paid through a bank account.

Depreciation Account:

The depreciation account is debited with the amount of depreciation charged on the machinery, which is 3,196.

Interest Account:

The interest account is debited with the interest charged on the hire purchase system for the first, second, and third year, which amounts to 1,598, 1,398, and 560, respectively. It is credited to the hire purchase account.

Hire Purchase Interest Suspense Account:

The hire purchase interest suspense account is debited with the interest charged on the hire purchase system for the first, second, and third year, which amounts to 1,598, 1,398, and 560, respectively. It is credited to the hire purchase account.
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X purchased a machine on hire purchased system. The total cash price o...
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X purchased a machine on hire purchased system. The total cash price of the machine is 31,960.down payment 8,000and three instalments of 12,000,10,000,4,000 payable at the end of the first, second and third year's respectively. Interest is charged 5% p. a. Charge depreciation at 10% on straight line method. Prepare ledger accounts in the books of x.?
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X purchased a machine on hire purchased system. The total cash price of the machine is 31,960.down payment 8,000and three instalments of 12,000,10,000,4,000 payable at the end of the first, second and third year's respectively. Interest is charged 5% p. a. Charge depreciation at 10% on straight line method. Prepare ledger accounts in the books of x.? 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 X purchased a machine on hire purchased system. The total cash price of the machine is 31,960.down payment 8,000and three instalments of 12,000,10,000,4,000 payable at the end of the first, second and third year's respectively. Interest is charged 5% p. a. Charge depreciation at 10% on straight line method. Prepare ledger accounts in the books of x.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X purchased a machine on hire purchased system. The total cash price of the machine is 31,960.down payment 8,000and three instalments of 12,000,10,000,4,000 payable at the end of the first, second and third year's respectively. Interest is charged 5% p. a. Charge depreciation at 10% on straight line method. Prepare ledger accounts in the books of x.?.
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