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    Siegie's Avatar
    Siegie Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jan 27, 2017, 06:15 AM
    Recording of Motor vehicle Asset purchased on credit
    I bought a new Vehicle - Invoice Shows R 150 000. It was 100% Bought on Credit.

    The Financing Company - Bank Statement Opening Balance Reflects more than the Vehicle Purchase Invoice, as it Includes Vat & Finance Charges. It shows R 250 000 instead.

    Which amount do I reflect in my Asset Account - Motor Vehicle, on which to claim Depreciation on. The 150 000 surely and not the R 250 000?

    Kindly indicate which accounts I then need to Debit & Credit, to be able o reflect the above transactions as such.

    If I Dt - Asset Vehicles with R 150 000 and
    Kt - Long Term Liability Loan - with R 150 000 as well, my Long Term Liability account will then not be matching my Bank Statement from the Financial Lender.

    Please assist urgently.

    Regrds
    Siegie
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    Jan 30, 2017, 03:19 PM
    Cost can be made up of many factors, purchase price, tax and charges. The total cost should be what you depreciate
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