Institute of Certified Bookkeepers
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Hire Purchase to Loan Transferral

  • Member in Practice
  • Practice Certificate
  • 13 posts
  • # 112902

Hi All,

I have a client who's Hire Purchase Finance and Asset has been transferred to a bank loan due to excess interest charges.  How do I bookkeep for this one?  The Hire Purchase was over 4 years and has been paid out and the asset and liability transferred to an asset Bank Loan.  This amount being less than the original Hire Purchase amount.  This means the asset and liability will become less.  How do I reduce the original amounts and where would the excess go? Confused??

  • 5 posts
  • # 118001

Mandi said:

Hi All,

I have a client who's Hire Purchase Finance and Asset has been transferred to a bank loan due to excess interest charges.  How do I bookkeep for this one?  The Hire Purchase was over 4 years and has been paid out and the asset and liability transferred to an asset Bank Loan.  This amount being less than the original Hire Purchase amount.  This means the asset and liability will become less.  How do I reduce the original amounts and where would the excess go? Confused??


 This happens when you're not responsible with the money. That's a penalty in your client's credit history

  • 4 posts
  • # 118002

Demixl said:

Mandi said:

Hi All,

I have a client who's Hire Purchase Finance and Asset has been transferred to a bank loan due to excess interest charges.  How do I bookkeep for this one?  The Hire Purchase was over 4 years and has been paid out and the asset and liability transferred to an asset Bank Loan.  This amount being less than the original Hire Purchase amount.  This means the asset and liability will become less.  How do I reduce the original amounts and where would the excess go? Confused??


 This happens when you're not responsible with the money. That's a penalty in your client's credit history


 You made me curious, if I take a refinance from one bank to be able to return the loaned money will affect negatively my credit history?

  • 5 posts
  • # 118003

MikkeyQ4 said:

Demixl said:

Mandi said:

Hi All,

I have a client who's Hire Purchase Finance and Asset has been transferred to a bank loan due to excess interest charges.  How do I bookkeep for this one?  The Hire Purchase was over 4 years and has been paid out and the asset and liability transferred to an asset Bank Loan.  This amount being less than the original Hire Purchase amount.  This means the asset and liability will become less.  How do I reduce the original amounts and where would the excess go? Confused??


 This happens when you're not responsible with the money. That's a penalty in your client's credit history


 You made me curious, if I take a refinance from one bank to be able to return the loaned money will affect negatively my credit history?


 No, it will not if you'll pay the monthly amount in time. You should apply for a refinance before way before the payment day. For the bank it doesn't matter where you take the money to pay them, it matters not to be late. When you get in the situation that you cannot afford to pay the loan, always consider refinancing, it won't affect your reputation and you'll have some benefits for the next loans, as you'll be a trusted client. For the % and other information about refinancing go on https://www.xn--lnemegleren-x8a.no/refinansiering

  • Fellow in Practice
  • Practice Certificate
  • 266 posts
  • # 118004

Hi Mandy

 

This isnt a common scenario.  I suggest seeking help from the accountant as to the journal he would like to use to bring in the new loan values and writeoff where necessary the actual asset.  An email to them would probably do the job.

 

 

  • Member in Practice
  • Practice Certificate
  • 13 posts
  • # 118010

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