ABC Associates entered into a financial agreement on 1-4-2014 with Flexible Leasing Ltd. for lease of a car. The price of the car was $ 2,00,000 and the quarterly lease rentals wee agreed at $ 90 per thousand payable at the beginning of every quarter. ABC Associates kept up their payments but by 25-3-2015 they approached and obtained the consent of the leasing company for treating the arrangement as one of Hire-purchase from the beginning on the following terms: Period: 3 years Quarterly hire: $ 30,000 payable at the beginning of the quarter. It was agreed that the loan rentals paid will be treated as hire monies and that the balance due upto 31-3-2015 will be settled by ABC Associates on that date with interest @ 18% p.a. on various instalments during the year. The rate of depreciation on the car is 25%. Show Flexible Leasing Ltd.'s A/c and Interest Suspense A/c in the books of ABC Associates for the year 2014-15. Calculations are to be rounded off to the nearest value.
ABC Associates entered into a financial agreement on 1-4-2014 with Flexible Leasing Ltd. for lease of a car. The price of the car was $ 2,00,000 and the quarterly lease rentals wee agreed at $ 90 per thousand payable at the beginning of every quarter. ABC Associates kept up their payments but by 25-3-2015 they approached and obtained the consent of the leasing company for treating the arrangement as one of Hire-purchase from the beginning on the following terms: Period: 3 years Quarterly hire: $ 30,000 payable at the beginning of the quarter. It was agreed that the loan rentals paid will be treated as hire monies and that the balance due upto 31-3-2015 will be settled by ABC Associates on that date with interest @ 18% p.a. on various instalments during the year. The rate of depreciation on the car is 25%. Show Flexible Leasing Ltd.'s A/c and Interest Suspense A/c in the books of ABC Associates for the year 2014-15. Calculations are to be rounded off to the nearest value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Associates entered into a financial agreement on 1-4-2014 with Flexible Leasing Ltd. for lease of a car. The price of the car was $ 2,00,000 and the quarterly lease rentals wee agreed at $ 90 per thousand payable at the beginning of every quarter. ABC Associates kept up their payments but by 25-3-2015 they approached and obtained the consent of the leasing company for treating the arrangement as one of Hire-purchase from the beginning on the following terms:
Period: 3 years
Quarterly hire: $ 30,000 payable at the beginning of the quarter.
It was agreed that the loan rentals paid will be treated as hire monies and that the balance due upto 31-3-2015 will be settled by ABC Associates on that date with interest @ 18% p.a. on various instalments during the year. The rate of depreciation on the car is 25%.
Show Flexible Leasing Ltd.'s A/c and Interest Suspense A/c in the books of ABC Associates for the year 2014-15. Calculations are to be rounded off to the nearest value.
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