Question

On June 30, Petrov Co. has $128,700 of accounts receivable. 

July 4 Sold $7,245 of merchandise (that had cost $5,000) to customers on credit. 

9 sold $20,000 of accounts receivable to Main Bank. Main charges a 4% factoring fee. 

17 Received $5,859 cash from customers in payment on their accounts. 

27 Borrowed $10,000 cash from Main Bank, pledging $12,500 of accounts receivable as security for the loan. 

Prepare journal entries to d the above selected July transactions. (The company uses the perpetual inventory system.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 

Answer 1

Date Accounts title Debit Credit Jul-04 Accounts receivable $7,245 Sales 7,245 ,21% Jul-04 Cost of goods sold S 5,000 Merchandise $5,000 Jul-09 Cash $ 19,200 800 Factoring Charges Accounts receivable S 20,000 Jul-17 Cash s5,859 Accounts receivable $ 5,859 Jul-27 Cash 10,000 Discount on Accounts receivable $2,500 Accounts receivable 12,500