I am new to the forum and to accounting for more complicated transactions (so far, I have been recording mainly simple sales and purchases). I am about to record my first HP agreement for machinery my employer - a small business owner - purchased recently, and I would be grateful for your advice. My intended journal looks like this:
Dr Tangible asset a
Dr VAT b
Cr bank (deposit paid) c
Cr HP liability a + b – c
Is it correct? In addition, the HP document lists acceptance fee and option to purchase fee, stating they are included in instalments. I am not sure how to account for these two fees.
Thank you in advance for your help!