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Using Transactions Only To Reflect The Chattel Mortgage

The main advantage of using this option is that you do not have another account to reconcile each month. The main disadvantage is that accountants may find it difficult to find all the information they need for the Statement of Position and Balance Sheet. 

Below are suggested codes with appropriate GST categories that should be used when entering transactions.

Codes Required GST Category
HP Payments Standard
Interest HP Financial
Chattel Payments Loans, Tax
Plant Sales Standard
HP Loans In Loans, Tax
Chattel Loan In Loans, Tax
Plant Purchases Capital
Stamp Duty GST Free
Bank Fees Financial

Below is an example of how you would record a Chattel Mortgage: 

Your business has recently purchased a new ute under finance after trading in the old ute. A deposit was made on the purchase. The information of the purchase is as captured in the below table: 

ITEM AMOUNT GST TOTAL

New Ute Purchase

$27,000

$2,700

$29,700 Dr

Traded in Ute

$7,000

$,700

$7,700 Cr

Finance Received

$20,000

 

$20,000 Cr

Deposit

 

 

$2,000 Dr

The only information available is the tax invoice, and the accountant wants the transaction to be kept simple as they will do adjusting entries at tax time. From the information in the above table, enter the purchase in Agrimaster against the codes in the table below. This is the simplest method of recording a Chattel Mortgage. The subsequent repayments will all be coded to Chattel Payments. 

CODE AMOUNT GST TOTAL

Plant Purchase

$27,000

$2,700

$29,700 Dr

Plant Sales

$7,000

$,700

$7,700 Cr

Chattel Loan In

$20,000

 

$20,000 Cr

Deposit

 

 

$2,000 Dr

Your accountant will adjust for the interest and other fees involved at tax time. 

 

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