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The van is a fixed asset and the hire purchase finance is either a current liability or a long-term liability.
When you acquired the vehicle then the full cost of the asset is entered and the full finance entered. Usually a journal entry although you could have done this through suppliers.
When you making the monthly repayments, part of this will be capital and the remainder interest, it is usually easiest to split this evenly over the term of the finance so for example if you borrowed £10k and repay 24 at sat £450, £416.67 will go to the finance and the balance go to hire purchase interest (an expense).
The vehicle would be depreciated like any other debit depreciation (expense) and credit accumulated depreciation (associated with fixed asset).
The van is a fixed asset and the hire purchase finance is either a current liability or a long-term liability.
When you acquired the vehicle then the full cost of the asset is entered and the full finance entered. Usually a journal entry although you could have done this through suppliers.
When you making the monthly repayments, part of this will be capital and the remainder interest, it is usually easiest to split this evenly over the term of the finance so for example if you borrowed £10k and repay 24 at sat £450, £416.67 will go to the finance and the balance go to hire purchase interest (an expense).
The vehicle would be depreciated like any other debit depreciation (expense) and credit accumulated depreciation (associated with fixed asset).
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