Calculation of interest expense
= 625000*12%*1/12 = 6250
So Journal Entry
Debit Interest Expense 6250
Debit Pacific Bank 250250
Credit Cash 256500
Liability Financing = N ince Charge Iggy Co assigns $800,000 of its accounts receivable to LMU Bank as collateral fora AR: $600,000 note. Iggy Co continues to collect the accounts receivable; the account debtors <X1% are not notified of the arrangement. LMU Bank assesses a finance charge of 1% of the accounts receivable assigned and an interest on the note of 12%. Iggy Co makes monthly 000 - Notes payments to LMU Bank for all cash it collects on the...
Sheffield Corp. assigns $4400000 of its accounts receivables as collateral for a $3.00 million loan with a bank. The bank assesses a 2% finance charge on the loan amount and charges interest on the note at 7%. What would be the journal entry to record this transaction? Debit Cash for $2730000, debit Interest Expense for $270000, and credit Notes Payable for $3000000 Debit Cash for $1830200, debit Interest Expense for $60000, debit Due from Bank for $1400000, and credit Accounts...
Moon Inc. assigns $4,500,000 of its accounts receivables as collateral for a $3 million loan with a bank. The bank assesses a 3% finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction? Answers: A. Debit Cash for $1,940,000, debit Interest Expense for $90,000, debit Due from Bank for $1,500,000, and credit Accounts Receivable for $4,500,000. B. Debit Cash for $2,730,000, debit Interest Expense for $270,000,...
4. (10 points)On March 1, 2014, Rasheed Company assigns $800,000 of its accounts receivable to the Third National Bank as collateral for a $500,000 loan due April 1, 2014. The assignment agreement calls for Rasheed Company to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 9% (a realistic rate of interest for a note of this type).a. Prepare the March 1, 2014, journal entry...
4. (10 points) On March 1, 2014, Rasheed Company assigns $800,000 of its accounts receivable to the Third National Bank as collateral for a $500,000 loan due April 1, 2014. The assignment agreement calls for Rasheed Company to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 9% (a realistic rate of interest for a note of this type) a. Prepare the March 1, 2014,...
Scarbrough Corp. factored $600,000 of accounts receivable to Duff Corp. on October 1, year 2. Control was surrendered by Scarbrough. Duff accepted the receivables subject to recourse for nonpayment. Duff assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Duff charged 15% interest computed on a weighted-average time to maturity of the receivables of fifty-four days. The fair value of the recourse obligation is $9,000. Scarbrough will receive and record cash...
16. On September 1, Jerry Co. sold $2,000 of services for cash. On September 10, Jerry Co. sold $5,000 of services on account. On September 20, Jerry Co. collected $3,500 from accounts receivable. Calculate the ending balance in the Cash account for September assuming no beginning balance.Answer $5,500 17. On September 1, Jerry Co. sold $2,000 of services for cash. On September 10, Jerry Co. sold $5,000 of services on account. On September 20, Jerry Co. collected $3,500 from accounts...
On April 1, 2020, Grouper Company assigns $503,700 of its accounts receivable to the Third National Bank as collateral for a $340,000 loan due July 1, 2020. The assignment agreement calls for Grouper to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2020. journal entry for Grouper Company....
On April 1, 2020, Grouper Company assigns $503,700 of its accounts receivable to the Third National Bank as collateral for a $340,000 loan due July 1, 2020. The assignment agreement calls for Grouper to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Your answer is partially correct. Prepare the April 1, 2020,...
On April 1, 2020, Wildhorse Company assigns $549,400 of its accounts receivable to the Third National Bank as collateral for a $301,600 loan due July 1, 2020. The assignment agreement calls for Wildhorse to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the journal entry for wildhorse company