A On 1 January 19 X3 J Donkins bought a machine (cash price \(£ 2,092\) ) from CD \& Co. Ltd on the following hire purchase terms. Donkins was to make an immediate payment of \(£ 600\) and three annual payments of \(£ 600\) on 31 December in each year. The rate of interest chargeable is 10 per cent per annum.

Donkins depreciates this machinery by 10 per cent on the diminishing balance each year.

(a) Make the entries relating to this machine in Donkins' ledger for the years 19X3, 19X4 and 19X5. (All calculations are to be made to the nearest \(£\).)

(b) Show how the item machinery would appear in the balance sheet as at 31 December 19X3.