Bulwell Aggregates Ltd wish to expand their transport fleet and have purchased three heavy lorries with a list price of $£ 18,000$ each. Robert Bulwell has negotiated hire purchase finance to fund this expansion, and the company has entered into a hire purchase agreement with Granby Garages plc on 1 January 2011. The agreement states that Bulwell Aggregates will pay a deposit of $£ 9,000$ on 1 January 2011, and two annual instalments of $£ 24,000$ on 31 December 2011 and 2012 and a final instalment of $£ 20,391$ on 31 December 2013.

Interest is to be calculated at $25 \%$ on the balance outstanding on 1 January each year and paid on 31 December each year.

The depreciation policy of Bulwell Aggregates Ltd is to write off the vehicles over a four-year period using the straight line method and assuming a scrap value of $£ 1,333$ for each vehicle at the end of its useful life.

The cost of the vehicles to Granby Garages is $£ 14,400$ each.

Required:

(a) Account for the above transactions in the books of Bulwell Aggregates Ltd, showing the entries in the income statement and statement of financial position for the years 2011, 2012, 2013 and 2014.

(b) Account for the above transactions in the books of Granby Garages plc, showing the entries in the hire purchase trading account for the years 2011, 2012, 2013. This is the only hire purchase transaction undertaken by this company.
Calculations to the nearest $f$.
(Association of Accounting Technicians)