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Community > Accounting >

Hire Purchase with Part exchange

Started by Stacey Williams -   in Accounting

Hi All,

Another newbie to Xero here and I'll apologise in advance if there's a similar question already asked!

I have recently purchased some machinery which is on a hire purchase loan and part exchanged an older version of the same machine. I have a purchase invoice for the new machine and have a self billing sales invoice for the part exchange.

I have paid the VAT and a deposit upfront, would I part pay the purchase invoice for the VAT and deposit, contra the sales invoice and then journal the remaining money to a Hire purchase account? If so, how would I do that?!!

Hope I make sense!

Thanks in advance for any replies!
Stacey
Something like:
Supplier bill for the purchase of the new machine.
Supplier credit note for the part exchange coded to your account for income from disposal of fixed assets.
Allocate credit note against bill.
Reconcile deposit and VAT payment against bill.
Balance remaining should equal value of hire purchase finance receivable. This can be accounted for with another supplier credit note, coded to the Hire Purchase account with tax rate No VAT.

Hope this helps
 

John Knight