This question was asked in Important Accounting Concepts

Raja purchased an asset under hire purchase system for 60000 payments to be made 15000 down and three installments of 18000 each at the end of each year. Rate of interest is 10% p.a Raja depreciates asset @10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset.the selling company after spending 1500 on repairs it sold away the asset for 38000. Prepare necessary ledger accounts in the books of both the parties

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