Installment Purchase System

Problem 1: The Mohit Co. purchased a machine from M/s Sachin Traders on installment system on1st Jan 1996, paying cash Rs. 1 and agreeing to pay further three installments of Rs. 1 each on !1 st "ec e#ery year. The cash price of the machine is Rs. !$%& and M/s Sachin Traders charge interest at &' p.a. The(uyer )rites off 1 ' p.a. as depreciation on Reducing *alance Method. +ass the ,ournal entries and prepare ledger accounts in the (oo-s of (oth the parties. Problem 2: .o)ardhan *us Ser#ices purchased a (us from Telco on installment system on 1 st Jan 199!. Cash price of the (us is Rs. !% . /t )as agreed to pay Rs. 0 on agreement and Rs. 6$60 each in four half yearly installments. /nterest is charged at 1 ' p.a. on unpaid (alance (y the #ender. 1alf yearly interest is calculated (y the #ender. .o)ardhan *us Ser#ices charges 1&' depreciation on diminishing (alance. 2rite necessary accounts in the (oo-s of .o)ardhan *us Ser#ices assuming that the (oo-s are closed on !1st "ec e#ery year. Problem 3: 2rite up Motor 3orry 4/c and 5ender 4/c in the (oo-s of the purchaser and the interest suspense account in the (oo-s of the #ender co. from the follo)ing67 +urchaser 6 4nant Trading Co. 5ender 6 /ndian Motor Co. 4rticle 6 Motor 3orry "ate of agreement 6 1st 4pril, % Cash price 6 Rs. 08, 4t the time of agreement 6 Rs. %8, Mode of +ayment 6 T)o installments of Rs. %&, each on !1 st March each th year and the remaining 9(alance: of Rs. 1 , on ! Septem(er, 1998 Rate of /nterest 6 1 ' per annum "epriciation 6 1 ' p.a. on Reducing *alance Method. Problem 4: +urchaser 6 M/s Sa#ita Tranport Co. 5ender 6 M/s +rashant Co. 4rticle 6 Motor "ate of agreement 6 1st 4pril % % +urchase system 6 installment purchase system Mode of payment 6 ;n agreement Rs. !6 and Three annual installments st of Rs. !0& Rs. &10 and Rs. 89& each on !1 March e#ery year Rate of interest 6 1 ' p.a. "epreciation 6 1 ' p.a. on reducing (alance method. 2rite 5ender 4/c and Motor 4/c in the (oo-s of M/s Sa#ita Trading Co. and also )rite M/s Sa#ita Trading Co. 4/c in the (oo-s of M/s +rashant Co. Ma-e calculations to the nearest rupee.