2 1 Factoring (Version 2) Mars Company is experiencing financial difficulties and needs cash to keep its operations running. To get this loan, Mars has decided to use its receivables as collateral in a borrowing transaction with a financing company named Utley. It is stated in this borrowing arrangement that if Mars is unable to repay the loan then Utley can covert the collateral into cash by collecting the receivables. 345 Instructions 5 Prepare journal entries for the following transactions from the point of view of Mars Company: 9 a) Accounts receivable in the amount of $1,600,000 were assigned to Utley Finance Co. by Mars as security for a loan of $1,400,000. Utley charged a 2% commission on the accounts; the interest rate on the note is 15%. (3 marks) b) During the first month, Mars collected $700,000 on assigned accounts after deducting $1,500 of discounts. Mars wrote off a $1,700 assigned account. (4 marks) 7 + 8 c) Mars paid to Utley the amount collected plus one month's interest on the note. (4 marks) 9 10 Please provide your complete journal entries (omit explanations) in the table below. 10 11 Account Titles 12 a) 13 14 15 16 17 18 19 20 b) Debit Credit Please show any supporting calculations in the blue shaded region below. Please enter any percents needed for calculations in the green shaded area.