Part 1 shows the reducing balance method .
This article looks at how the hire purchase interest is apportioned over the period of the agreement using the Straight Line method.
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Note that the hire purchase interest needs to be apportioned over the period of the agreement. The commonly used methods are the Reducing Balance method,Straight Line method and Sum of Digits or Rule of 78 method Below example illustrate the Reducing Balance method to apportion hire purchase interest:- [...] |  FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach. | |||||
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