A D Lane purchased two cars for his business under hire purchase agreements: begin{tabular}{lcc} Registration number & DL 1 & DL 2 Date of

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A D Lane purchased two cars for his business under hire purchase agreements:

\begin{tabular}{lcc}

Registration number & DL 1 & DL 2 \\

Date of purchase & 31 July 2012 & 30 November 2012 \\

Cash price & $£ 27,000$ & $£ 36,000$ \\

Deposit & $£ 4,680$ & $£ 7,200$ \\

Interest (deemed to accrue evenly & & \\

\multicolumn{1}{l}{ over the period of the agreement) } & $£ 2,880$ & $£ 3,600$

\end{tabular}

Both agreements provided for payment to be made in 24 monthly instalments commencing on the last day of the month following purchase.

On 1 September 2013, vehicle DL 1 was involved in a crash and was declared a write-off. In full settlement on 20 September 2013:

(a) the motor insurers paid out $£ 18,750$; and

(b) the hire purchase company accepted $£ 10,700$ for the termination of the agreement.

The firm prepares its financial statements to 31 December and provides depreciation on a straight line basis at a rate of $25 \%$ per annum for motor vehicles, apportioned as from the date of purchase and up to the date of disposal.

All instalments were paid on the due dates.

The remaining balance on the hire purchase company account in respect of vehicle DL 1 is to be written off.

Required:

Record these transactions in the following accounts, carrying down the balances as on 31 December 2012 and 31 December 2013:

(a) Motor vehicles

(b) Depreciation

(c) Hire purchase company

(d) Assets disposal.