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First of All keep one thing in your mind that Vehicle is not qulifying asset for capitalization of interest / finance cost as per IAS Borrowing Cost. "A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale". So Keeping this in your mind.
First of all:
Dr. Non Current Asset
Dr. Bank Charges (if any)
Cr. Cash/Bank (if there is a down payment)
Cr. Non-current liability (principal loan amount)
Subsequetly, amortize over period of time charge interest expense (included in equal monthly instalment) directly to profit or loss and decrease loan liability by part of principal in equal monthly instalment.
Dr. Non Current liability
Dr. Interest Expense
Cr. Cash / Bank
PREPARE AMORTIZATION SCHEDULE USING REDUCING INTEREST RATE.
