Help with posting a new motore vehicle please

dawnc Registered Posts: 3 New contributor 🐸
Hi my boss has just purchased a new motor vehicle on finance the total cost for the vehicle was 8000.00. He has paid 1000.00 deposit to the finance company to keepthe costs down. so leaving a balance of 7000.00. i then have finance charges of 1650.08 and a charge for admin of 150.00 thus bring the total to 8800.08. He has payment of 180.21 a month for the next 48 months, and i know this relates to 8650.08, being the amount paid back and then i have the 150.00 admin charge. how do i post it to pegasus pleaseeeeeeeeeeeeeee!!!!!!!!! is It

FA 8000.00
Lombard 7000.00
Finance 1650.08
Admin Fee 150.00
I've got a diffrence of 880.08

Im sorry to be THICK, having a blond moment, there are no VAT implication. Any help would be great.:crying:


  • sheelagh
    sheelagh Registered Posts: 133 Dedicated contributor 🦉
    FA Motor on Finance

    Hi Dawn

    I would do this -

    DR Cost of Vehicle - £8000
    DR Finance fees £150
    DR Interest cost - £1650.08

    Total Debits £9800.08

    CR Lombard £8800.08 being the total amount of the loan and interest (48 x £180.21) plus the £150 fee
    CR Bank £1000 being the deposit

    I hope this helps
    BIG WAL Registered Posts: 133 Dedicated contributor 🦉
    Hi Dawn,

    As the interest is spread over 4 accounting years, I normally do the following.

    Post the £8000 to FA.

    I usually create an HP Liability account, and Cr this with £8000. Post the deposit against this (i.e. Cr Bank Dr HP Liability) which brings the outstanding liability down to the £7000 due to Lombard. (I suppose there is no reason why you can't just make Lombard a creditor - it's just I find this easier for posting the monthly payments). It also makes checking easier in case of errors.

    Then with each months HP instalment, post £145.83 to HP Liability, and £34.38 to HP Interest. (Again I prefer a seperate HP Interest A/c to differentiate from bank interest) Over the 48 months, the HP liability will be nil (apart from the imaterial odd coppers), and the interest will be correctly shown for each financial year.

    Regarding the finance fee of £150, I would post this against the relevant account when paid, as sometimes it's paid with the first instalment, and sometimes with the last. Either way it will be charged in the period it's paid.

    I always keep a manual record of the calculation, which I refer to when posting the monthly instalments, as I can never remember how much is interest and how much is capital from one month to the next. This also allows me to check that the actual liability balance on the actual accounts correspond to my manual calculation, as well as show on the annual accounts the liability for up to 1 year as well as over one year.

    Hope this makes sense, and helps.
  • dawnc
    dawnc Registered Posts: 3 New contributor 🐸
    Thank you All

    Thank you all for you help, i had originally thought to input it like big wal had said, the £1000 has already been taken out of the bank, but i have been posting the total amount of the the repayments to the Creditors account every month rather than splitting up the interest costs, but i will do it like that from the beginning of this loan, thank you all very much for your help.:thumbup:
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