Instalment Payment System:
The instalment payment system refers to a method of payment where the purchase price of a product or service is divided into several equal payments, known as instalments, over a specified period. This system allows customers to make purchases without paying the full amount upfront, making it more affordable and convenient for them to acquire goods or services.

Difference between Hire Purchase System and Instalment Payment System:
While both the hire purchase system and instalment payment system involve paying for goods or services in instalments, there are some key differences between the two:

1. Ownership: In a hire purchase system, the ownership of the goods is transferred to the buyer only after the final payment is made. However, in an instalment payment system, the ownership is transferred to the buyer as soon as the first instalment is paid.

2. Interest: In a hire purchase system, the seller charges interest on the outstanding balance until the full payment is made. On the other hand, an instalment payment system may or may not involve interest charges, depending on the agreement between the buyer and the seller.

3. Return of Goods: In a hire purchase system, if the buyer fails to make the payments as per the agreement, the seller has the right to repossess the goods. In an instalment payment system, the buyer typically has the option to return the goods if they are unable to continue making payments.

Journal Entries:
The journal entries in the books of both parties (buyer and seller) for both the hire purchase system and instalment payment system are as follows:

Hire Purchase System:

1. Buyer's Books:
- On purchase of goods:
- Debit: Purchases
- Credit: Hire Purchase Creditor

- On each instalment payment:
- Debit: Hire Purchase Creditor
- Credit: Bank/Cash

2. Seller's Books:
- On sale of goods:
- Debit: Hire Purchase Debtor
- Credit: Sales

- On each instalment received:
- Debit: Bank/Cash
- Credit: Hire Purchase Debtor

Instalment Payment System:

1. Buyer's Books:
- On purchase of goods:
- Debit: Purchases
- Credit: Instalment Payable

- On each instalment payment:
- Debit: Instalment Payable
- Credit: Bank/Cash

2. Seller's Books:
- On sale of goods:
- Debit: Instalment Receivable
- Credit: Sales

- On each instalment received:
- Debit: Bank/Cash
- Credit: Instalment Receivable

These journal entries reflect the transactions related to the purchase and payment of goods under both the hire purchase system and instalment payment system, ensuring accurate recording of the financial transactions for both parties involved.