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ILLUSTRATION 22. A company sells goods on Hire Purchase on the basis 25% down, the balance with 20% interest thereon being payable in 8 equal
ILLUSTRATION 22. A company sells goods on Hire Purchase on the basis 25% down, the balance with 20% interest thereon being payable in 8 equal quarterly instalments on 30th June, 30th September, 31st December and 31st March each year. The first instalment is payable at the end of the quarter in which the sale is made. The company transfers 50%, 30% and 20% of the interest to Profit and Loss Account in the first, second and third years respectively. Balance on 1-4-2014 : Hire Purchase Debtors $75,375, Hire Purchase Interest Suspense $79,900. Hire purchase sales (exclusive of interest) which have evenly occurred over each of the three calendar years are : 2012-2013 5 80,000, 2013-14 1,00,000, 2014-15 $76,000. All dues were promptly paid in each year. Make out for the year 2014-15(1) Hire Purchase Debtors Account, (2) Hire Purchase Suspense Account
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