X purchased a car from Y costing 1,50,000 on hire purchase system. Payment was to be...

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X purchased a car from Y costing 1,50,000 on hire purchase system. Payment was to be made 30,000 down and remainder in 3 equal annual instalments together with interest at 5% p.a. X provides depreciation at 20% p.a. on diminishing balance basis. X paid the first instalment at the end of first year but could not pay the next. Y took possession of the car. He spends 5,800 on the car and sold it for 80,000. Show necessary ledger accounts in the books of both the parties. X purchased a car from Y costing 1,50,000 on hire purchase system. Payment was to be made 30,000 down and remainder in 3 equal annual instalments together with interest at 5% p.a. X provides depreciation at 20% p.a. on diminishing balance basis. X paid the first instalment at the end of first year but could not pay the next. Y took possession of the car. He spends 5,800 on the car and sold it for 80,000. Show necessary ledger accounts in the books of both the parties.

Answer rating: 100% (QA)

We Create the ledger accounts for both parties X and Y 1 Ledger Accounts for X a Car Account Date Pa... View the full answer