Nakuru Gas Company purchased Machinery on hire-purchase basis on 1st July, 2015. The cash price of...

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Nakuru Gas Company purchased Machinery on hire-purchase basis on 1st July, 2015. The cash price of the machinery is Shs. 75,000. The purchasing Company agreed to pay Shs. 15,000 on signing of the agreement and balance in six half-yearly installments of Shs. 10,000 plus interest @ 12% p.a. on unpaid amount. The Purchasing Company has decided to write off depreciation @ 20% p.a. on original cost basis. Give necessary ledger accounts in the books of the purchasing company assuming that the books are closed on 31st December each year. (25marks) Nakuru Gas Company purchased Machinery on hire-purchase basis on 1st July, 2015. The cash price of the machinery is Shs. 75,000. The purchasing Company agreed to pay Shs. 15,000 on signing of the agreement and balance in six half-yearly installments of Shs. 10,000 plus interest @ 12% p.a. on unpaid amount. The Purchasing Company has decided to write off depreciation @ 20% p.a. on original cost basis. Give necessary ledger accounts in the books of the purchasing company assuming that the books are closed on 31st December each year. (25marks)

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