ranjan press purchased a printing press on hire purchases system, over a period of four years.rs.6000 was paid immediately and the balance by four annual instalment of same equal amount paid on the last date of each year. the cash value of the printing press on delivery was rs.27,300. you are required to pass journal entries in the books of ranjan press.
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Printing press a/c. Dr ₹27,300
To Cash a/c. ₹6,000
To Vendor a/c. ₹21,300
(Being printing press purchased on hire purchase system)
Vendor a/c. Dr. ₹5,325
To Cash a/c. ₹5,325
(Being installment paid for 1st year)
Vendor a/c. Dr. ₹5,325
To Cash a/c. ₹5,325
(Being installment paid for 2nd year)
Vendor a/c. Dr. ₹5,325
To Cash a/c. ₹5,325
(Being installment paid for 3rd year)
Vendor a/c. Dr. ₹5,325
To Cash a/c. ₹5,325
(Being installment paid for 4th year)
I hope it helps :)
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