1. Sunshine Inc. assigns P1,500,000 of its accounts receivables as collateral for a P1,000,000 loan with a bank. Thebank assesses a 3% finance fee and charges interest on the note at 6%. The journal entry to record this transactionwould not include aa. Debit to cash for P970,000b. Debit to finance charge for P30,000c. Credit to notes payable for P1,000,000d. Credit to accounts receivable for P1,000,000Numbers 2-3Janine Company factored P5,000,000 of accounts receivable. Control was surrendered by the entity. The financecompany assessed a fee of 2% and retains a holdback equal to 10% of the accounts receivable. In addition, the financecompany charged 12% interest computed on a weighted average time to maturity of the accounts receivable for 30 days?2. What is the amount initially received from the factoring of accounts receivable?a. 4,250,000b. 4,200,000c. 4,700,685d. 4,200,6853. What total amount should be recognized as loss on factoring?a. 299,315b. 799,315c. 250,000d. 0Numbers 4-5On August 31, 2023, an entity discounted with recourse a note at the bank at discount rate of 15%. The note wasreceived from the customer on August 1, 2023 for 90 days with face amount of P9,000,000 and an interest rate of 12%.The discounting transaction is accounted for as secured borrowing. The customer paid the note to the bank on October30, 2023, the date of maturity.4. What is the interest expense to be recognize on August 31, 2023?a. 90,000b. 51,750c. 231,750d. 270,0005. The entry on October 30, 2023 will includea. Debit to notes receivable discounted P9,000,000b. Debit to loans payable P9,038,250c. Credit cash P9,000,000d. Debit to loans payable P9,000,000Numbers 6-7Marylett Company accepted forma customer in settlement of an account a P4,000,000, 90-day 12% note dated August 31,2025. On September 30, 2025, the entity discounted the note at 15% with recourse at the bank. The note was paid in fullby the maker on maturity. The discounting with recourse is accounted for as a conditional sale with recognition of acontingent liability.6. What amount was received from the note receivable discounting?с. 4,103,000d. 3,965,500a. 4,017,000b. 4,120,0007. What is the loss on note receivable discounting?a. 40,000c. 17,000b. 23,000d. 0

JF termed as Journal entries which records the transactions of company into day books or the…

bank assesses a 3% finance fee and charges interest on the note at 6%. The journal entry to record thi would not include a a. Debit to cash for P970,000 b. Debit to finance charge for P30,000 c. Credit to notes payable for P1,000,000 d. Credit to accounts receivable for P1,000,000 mbers 2-3 ine Company factored P5,000,000 of accounts receivable. Control was surrendered by the entity. npany assessed a fee of 2% and retains a holdback equal to 10% of the accounts receivable. In addition npany charged 12% interest computed on a weighted average time to maturity of the accounts receivabl What is the amount initially received from the factoring of accounts receivable? a. 4,250,000 c. 4,700,685

bank assesses a 3% finance fee and charges interest on the note at 6%. The journal entry to record thi would not include a a. Debit to cash for P970,000 b. Debit to finance charge for P30,000 c. Credit to notes payable for P1,000,000 d. Credit to accounts receivable for P1,000,000 mbers 2-3 ine Company factored P5,000,000 of accounts receivable. Control was surrendered by the entity. npany assessed a fee of 2% and retains a holdback equal to 10% of the accounts receivable. In addition npany charged 12% interest computed on a weighted average time to maturity of the accounts receivabl What is the amount initially received from the factoring of accounts receivable? a. 4,250,000 c. 4,700,685

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
A ski company takes out a $400,000 loan from a bank. The bank requires eight equal repayments of the loan principal, paid annually. Assume no interest is paid or accumulated on the loan until the final repayment. How much of the loan principal is considered a current portion of a noncurrent note payable in year 3? A. $50,000 B. $150,000 C. $100,000 D. $250,000
Accounting for Notes Receivable Yarnell Electronics sells computer systems to small businesses. Yarnell engaged in the following activities involving notes receivable: a. On September 1, 2019, Yarnell sold a $10,000 system to Ross Company. Ross gave Yarnell a 6-month, 7% note as payment. b. On December 1, 2019, Yarnell sold a $6,000 system to Searfoss Inc. Searfoss gave Yarnell a 9-month, 9% note as payment. c. On March 1, 2020, Ross paid the amount due on its note. d. On September 1, 2020, Searfoss paid the amount due on its note. Required: Prepare the necessary journal and adjusting entries for Yarnell Electronics to record these transactions.
McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of 1,500,000 in 2019. McKinney estimates 2.5% of its sales will be uncollectible. Prepare the journal entry to record bad debt expense for McKinney at the end of 2019.
Computing the Proceeds from the Sale of Notes Receivable Below are several customer notes receivable that were sold without recourse. 1. An 8,000, 60-day, non-interest-bearing note sold after 15 days at 12%. 2. A 9,000, 12%, 60-day note sold alter 30 days at 14% 3. A 6,000, 10%, 90-day note sold after 30 days at 12% 4. A 10,000, 12%, 120-day note sold after 45 days at 15% Determine the proceeds from each of the preceding sales of customer notes receivable. (Assume a 360-day year.)
Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.