X purchased seven trucks on hire-purchase on 1.7.2014. The cash purchase price of each truck was ~ 50,000. He was to pay 20% of the cash purchase price at the time of delivery and the balance in five half-yearly instalments starting from 31.12.2014 with interest @ 5% p.a.
On X’s failure to pay the instalment due on 30.6.2015 it was agreed that X would return three trucks to the vendor and the remaining four would be retained by him. The vendor agreed to allow him a credit for the amount paid against these three trucks less 25%. Show the relevant accounts in the books of X assuming that his books are closed in June every year and depreciation @ 20% is charged on trucks.
