Question: On July 1, 2013, Eastern Printers purchased a printing machine from HMT Ltd. on hire purchase basis, payments to be made ~ 10,000 on the

On July 1, 2013, Eastern Printers purchased a printing machine from HMT Ltd. on hire purchase basis, payments to be made ~ 10,000 on the said date and the balance in three half yearly instalments of ~ 8,200, ~ 7,440 and ~ 6,300 commencing from December, 2013. The vendor charged interest at 10% p.a. calculated on half yearly basis.

Eastern Printers close their books annually on December 31 and provide depreciation at 10% per annum on diminishing balances in each year.

Determine the cash price of the machine and show the necessary Ledger Accounts in the books of Eastern Printers.

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