6) As per installment system interest suspense account includes
a) Installment amount and interest b) Total cash price and interest
c) Differences between total installment price and total cash price
Answers
Answer:
A part is the answer of installment system
Answer:
As per installment system interest suspense account includes
Explanation:
a) Hire-purchase Price =9000+(11000×4)= Rs. 53000
Less: Cash Price Rs. 90,000
Total Interest = Rs. 37000
b) The total Interest of Rs. 32000 is to be apportioned among the various installments i.e. 4th,3rd,2nd and 1st installment in the ratio of 1:2:3:4 (i.e. among 1st,2nd,3rd and 4th installment in the ratio of 4:3:2:1)
Share of 1st installment in the Interest = 1032000×4= Rs. 12800
Share of 2nd installment in the Interest = 1032000×3= Rs. 9600
Share of 3rd installment in the interest = 1032000×2= Rs. 6400
Share of 2nd installment in the interest = 1032000×1= Rs. 3200
ii) Interest Suspense Method: Buyer debits the asset with total cash price at the time of signing the contract under this method at the time of transfer of possession of asset; the total interest unaccrued is transferred to interest suspense account.
In investing, a suspense account is a type of brokerage account where a customer's proceeds from selling an investment may be recorded until the customer uses the money to invest in something else.
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