Hire Purchase double entry | AccountingWEB

Hire Purchase double entry

I am preparing the accounts for a client, using his previous accountants bookkeeping.
He has a HP agreement on which he pays installments of £210 per month. 

During the financial year, the previous accountant had done only the following entries each month with regards the HP contract:

Dr Trade Creditors (finance company) £210

Cr Bank £210

I know that I need to somehow account for the interest portion of things......what is the double entry required? I am going round in circles....again, another simple Q but I'm confusing myself just thinking about it anymore!


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HP Double Entry

Metrobrit |

It's dr HP interest (P&L) &

Sandnickel |

thanks guys, managed to sort

southgirlaccountant |

Have you checked


3 elements

B Roberts |