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Question: On 1st January, 1961, A. James obtained two motor vehicles, the total cash price of which was £2,400. Payment was to be made as follows:
(1) A deposit of £400.
(2) Four half-yearly instaknents of £538, the first being payable on 30th June, 1961. Interest at the rate of 6% per annum is included in the instalments.
In the accounts for the Trading Year to 31st December, 1961, depreciation at the rate of 20% per annum is to be written off the Motor Vehicles. Show the above transactions in the ledger of A. James and the Balance Sheet entry at 31st December, 1961.
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