How do I Part Exchange a tractor with a new Hire Purchase Agreement?

Watch our video explaining how to enter a new fixed asset below

The principal is to make it simple. We suggest you don’t put a Purchase Invoice on and a Credit Note and then pay it off but put a Bank Payment in for the value you are paying initially.

On the First line, enter your fixed asset nominal and set up the new asset you are buying.

On the Second Line, enter the part exchange by choosing it from the list of assets, once the asset nominal is entered. Ensure you use the ‘Sale’ option from the drop-down box and ensure the value you enter is a negative. 

If your trade in fixed asset is not listed use a Sundry Income nominal called Sale of Unlisted Fixed Assets.

On the Third Line, enter the amount of the loan you have borrowed (this figure should not include the interest you will pay in the future on each repayment). 

So firstly, create a new nominal in the Liabilities group of nominals, and then use this to enter the loan amount as a negative outside the scope of VAT (O).

On the Fourth Line, if it is applicable, enter the amount of your set up or arrangement fee, which can go to Bank Interest or HP interest or costs. It should be a nominal in your overhead section.