Journal Entry for Vehicle Purchase on Credit

Journal Entry for Vehicle Purchase on Credit

Journal entry for vehicle purchase would be recorded by debiting the vehicle account and crediting the individual creditor account. The asset was debited being increase in asset and creditor is credited being increase in liability. The sample journal entry is shown below

Date	Particular	Ledger Folio	Dr.	Cr.
	Vehicle		xxx
	Creditor			xxx

 

Example of Journal Entry for Vehicle Purchase on Credit

Company ABC purchased a new vehicle on credit for 500,000 from See motors. The transaction shall be recorded in the books of accounts by debiting the vehicle account as addition to asset and crediting the See motor as increase in liability. The journal entry is shown below

Date	Particular	Ledger Folio	Dr.	Cr.
	Vehicle		500,000
	See motor			500,000

The following journal entry shall be recorded on payment of liability. The liability shall be reduced / removed by debiting the See motor and cash would be credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	See Motor		500,000
	Cash			500,000