Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2021, the company id accounts receivable of $880,000 Lonergan needs approximately $540,000 to capitalize on a unique investment opportunity on July 1 2021. a local bank offers Lonergan the following two alternatives a Borrow $540,000, sign a note payable, and assign the entire receivable balance as collateral At the end of each month, remittance will be made to the bank that equals the amount of receivables collected plus 9% interest on the unpaid balance of the note at the beginning of the period b. Transfer $600,000 of specific receivables to the bank without recourse. The bank will charge a 3% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criterio are met Required: 1. Prepare the journal entries that would be recorded on July 1 for o alternative a b. alternative b 2. Assuming that 90% of all June 30 receivables de collected during July prepare the necessary joumal entries to record the collection and the remittance to the bank for a. alternative a b. alternativeb Complete this question by entering your answers in the tabs below. Re 1 RoQ10 Reg 2 Reg 20 Red IA Reg 13 Red 2A Reg 28 Prepare the journal entries that would be recorded on July 1 for alternative a. (ir ne entry is required for a transaction/even octo Journal entry required in the first account field.) View transaction list Journal entry worksheet Record the borrowing $540,000, sign a note payable and assign the entire receivable balance as collateral Note: Enter debits before credits General Journal Debit Credit Date July 01, 2021 Reg 1A Reg 1 og 2A R20 Prepare the journal entries that would be recorded on July 1 for alternative bill no entry is required for a traction et lect journal entry required in the first account field) View transaction list Journal entry worksheet Record the transfer $600,000 of specific receivables to the bank without recourse. The bank will charge a 3% factoring fee on the amount of receivables transferred Note: Enter debits before credite General Journal De Credit Date July 01, 2021 Check my work Reg 14 Reg in Reg 2 Reg 2 Assuming that 90% of all June 30 receivables are collected during suly, prepare the necessary Journal entries to record the collection and the remittance to the bank for alternative a. (If no entry is required for a transaction/event, welct " journal entry required in the feu account field.) View transaction list View journal entry worksheet No General Journal Deba CH Date July 31, 2021 1 560.000 Cash Notes payable 500.000 2 July 31, 2021 Cash Reg 1 Reg 10 Reg 2 20 Assuming that 90% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the collection and the remittance to the bank for alterative b. If no entry is required for a transaction event, select 'No Journal entry required in the account) View transaction ist Journal entry worksheet
