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Purchase of Cars

Our company had been leasing 3 cars on contract lease basis, the contract then came to an end. Instead of the lease company taking these cars back, they were then sold to the company for a total of £1500

How do i reflect this in the accounts ?

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By pn
09th Mar 2012 15:56

Purchase of Cars

 same as one would account for acquisition of a new car

Thanks (1)

Finance or operating lease?

I would imagine it was an operating lease so all accounting entries to date have been:

Dr P&L

Cr Bank

The cars are now company assets, so

Dr Fixed Asset additions £1,500

Cr Bank £1,500

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By biz2010
12th Mar 2012 17:27

Thanks

Yes it was an operating lease, just never come across this before.

 

Thanks for your help

 

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