I have a situation that I can't get my head round. The company I work for has an asset which was obtained through HP. After paying this HP for a number of years there was around 5k left to pay. Due to cash flow problems the directer decided to refinance the asset to inject some cash into the business. He took out a new HP, with the finance company valuing the asset at £20k + VAT. This meant that the remaining balance of the initial HP was cleared and the business received a £15k cash injection. But I can't quite get my head around the journals required. I have the added problem that the asset is valued at £15k on our books.
Any advice would be much appreciated.
Thanks in advance.