Answered: What is the carrying amount of the note…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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On December 1, 2020, RB Company assigned on a non notification basis accounts receivable of Php.6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for a bank loan. On December 31, 2020, the entity collected assigned accounts of Php.2,000,000 less discount of Php.200,000. The entity remittted the collections to the bank in partial payment for the loan. The bank applied first the collection to the to the interests and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of Php100,00 on the assigned accounts and wrote off assigned accounts totaling Php.300,000. What is the carrying amount of the note payable on December 31, 2020?

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