Question

Pr. 7-161-Accounts receivable assigned Prepare journal entries for Mars Co. for: (a) Accounts receivable in the amount of $500,000 were assigned to Utley Finance Co. by Mars as security for a loan of $425,000. Utley charged a 3% commission on the accounts, the interest rate on the note is 12% (b) During the first month, Mars collected $200,000 on assigned accounts after deducting $450 of discounts. Mars wrote off a $530 assigned account. (c) Mars paid to Utley the amount collected plus one month's interest on the note Solution 7-161 15,000 425,000 450 530 200,980 4,250 204,250

can someone explain how i got this answer pleas, i could not understand pleas explain ,, thank you

Answer 1

	General Journal	Debit	Credit
(a)	Cash	$410,000
	Finance Charge($500,000 × 3%)	$15,000
	Notes Payable		$425,000
(b)	Cash	$200,000
	Sales Discounts	$450
	Allowance for Doubtful Accounts	$530
	Accounts Receivable		$200,980
(c)	Notes Payable	$200,000
	Interest Expense($425,000 × 12% × 1/12)	$4,250
	Cash		$204,250