I have a journal I am struggling with which relates to car hire purchase. I Purchased a vehicle from a dealership and decided to take the option within the hire purchase agreement to hand the keys back to the dealership due to the vehicle value being less than the value of the remaining loan, when trading the vehicle in (Thus cancelling the agreement).
I processed a journal (please see attached) last year end which I don't think is correct and would like to know what the correction entry would be, keeping in mind that it is now in the previous year accounts (requiring a prior year adjustment). What should the journal have been and what is the correction?
2312 Long Term Loan 10883.51DR
0054 Fixed Asset Car 10883.51CR
0055 Fixed Asset Car - DPN 3611.49DR
0054 Fixed Asset Car 3611.49CR
0054 Fixed Asset Car 4546.26DR
8040 Profit Loss on Sale of Fixed Asset 4546.26CR
Can anybody help????
I processed a journal (please see attached) last year end which I don't think is correct and would like to know what the correction entry would be, keeping in mind that it is now in the previous year accounts (requiring a prior year adjustment). What should the journal have been and what is the correction?
2312 Long Term Loan 10883.51DR
0054 Fixed Asset Car 10883.51CR
0055 Fixed Asset Car - DPN 3611.49DR
0054 Fixed Asset Car 3611.49CR
0054 Fixed Asset Car 4546.26DR
8040 Profit Loss on Sale of Fixed Asset 4546.26CR
Can anybody help????