I had a dream of fishballs last night. My friends and I were having a hotpot and we 'Hire-Purchased' a bag of 30 fishballs. Since we did not buy it with cash we thought how to account for it?
I took out a journal pad and accounted the hire-purchased fishballs.
Firstly we need to capitalised the 30 fisballs which cost 20 cents per ball.
Dr. Fishball $6
Cr. Unexpired HP Charges $6
Secondly, account for repayments if any. Assume the repayment is $2 per week.
Dr. Unexpired HP Charges $2
Cr. Bank $2
Continuing the repayments will eventually extinguish the fishballs liability when the HP charges balanced out. Fortunately for us, there weren't any interest rates charged, otherwise we would have need a repayment schedule. And to our relief, GST is absent because the balls are food supplies....phew.
After journalising it, we had a fantastical hot pot.
I took out a journal pad and accounted the hire-purchased fishballs.
Firstly we need to capitalised the 30 fisballs which cost 20 cents per ball.
Dr. Fishball $6
Cr. Unexpired HP Charges $6
Secondly, account for repayments if any. Assume the repayment is $2 per week.
Dr. Unexpired HP Charges $2
Cr. Bank $2
Continuing the repayments will eventually extinguish the fishballs liability when the HP charges balanced out. Fortunately for us, there weren't any interest rates charged, otherwise we would have need a repayment schedule. And to our relief, GST is absent because the balls are food supplies....phew.
After journalising it, we had a fantastical hot pot.
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