Question

Check my work Exercise 7-16 Selling and pledging accounts receiva ble LO C3 On November 30, Petrov Co. has $130,600 of accounts receivable and uses the perpetual inventory system. Dec. 4 Sold $7,695 of merchandise (that had cost $4,925) to customers on credit, terns n/30. 9 Sold $18,284 of accounts receivable to Main Bank. Main charges a 6% factoring fee. 17 Received $4, 232 cash from customers in payment on their accounts. 27 Borrowed $10,448 cash from Main Bank, pledging $13,582 of accounts receivable as security for the loan. (1) Prepare journal entries to rdcord the above transactions. (2) Which transaction would most likely require a note to the financial statements? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 2 3 4 5 6 >

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Answer 1

Answer 1).

Date	General Journal	Debit	Credit
Dec 04	Accounts receivable	7,695
	Sales		7,695
	(To record merchandise sold)
Dec 04	Cost of goods sold	4,925
	Merchandise inventory		4,925
	(To record cost of goods sold)
Dec 9	Cash ($18,284 - $1,097)	17,187
	Factoring fees expense ($18,284 * 6 %)	1,097
	Accounts receivable		18,284
	(To record sales of accounts receivable to Center Bank)
Dec 17	Cash	4,232
	Accounts receivable		4,232
	(To record receive of  cash from customers)
Dec 27	Cash	10,448
	Notes payable		10,448
	(To record cash borrowed from Main Bank)
Dec 27	No journal entry required

Answer 2).

Note to Financial Statements:

Dec 27 - Accounts receivable in the amount of $13,582 are pledged as security for a $10,448 note payable (cash borrowed) from Center Bank.