Exercise 7-15

On April 1, 2017, Buffalo Company assigns $543,900 of its accounts receivable to the Third National Bank as collateral for a $313,200 loan due July 1, 2017. The assignment agreement calls for Buffalo to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type).

Exercise 7-15 On April 1, 2017, Buffalo Company assigns $543,900 of its accounts receivable to the Third National Bank as collateral for a $313,200 loan due July 1, 2017. The assignment agreement calls for Buffalo to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2017, journal entry for Buffalo Company. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 1, 2017 Prepare the journal entry for Buffalo's collection of $354,700 of the accounts receivable during the period from April 1, 2017, through June 30, 2017. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Prepare the journal entry for Buffalo's collection of $354,700 of the accounts receivable during the period from April 1, 2017, through June 30, 2017. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit On July 1, 2017, Buffalo paid Third National all that was due from the loan it secured on April 1, 2017. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2017 Click if you would like to Show Work for this question: Open Show Work