Question
Accounts receivable in the amount of 250,000 were assigned to the Fastfood Finance Company by Marshmallow, Inc.as security for a loan of 200,000. The Finance
Accounts receivable in the amount of 250,000 were assigned to the Fastfood Finance Company by Marshmallow, Inc.as security for a loan of 200,000. The Finance Company chargeda 4% commission on the face amount of the loan, and the note bears interest at 9% per year. During the first month, Marshmallow collected 130,000 on assigned accounts. This amount was remitted to the Finance Company along with one month interest on the note. Instructions: Make all the entries for Marshmallow. Inc. associated with a transfer of the accounts receivable, the loan, and the remittance to the finance company. Cash______(debit), Finance Charge_____(debit), Notes Payable____(Credit). Cash____(debit), Accounts Receivable____(credit).Notes Payable_____(debit), Interest Expense_____(debit),Cash_____(Credit).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started