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Lonergan Company occasionally uses its accounts recelvable to obtain immediate cash. At the end of June 2024 , the company had accounts receivable of $840,000.

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Lonergan Company occasionally uses its accounts recelvable to obtain immediate cash. At the end of June 2024 , the company had accounts receivable of $840,000. Lonergan needs approximately $560,000 to capitalize on a unique investment opportunity. On July 1,2024 , a local bank offers Lonergan the following two alternatives: a. Borrow $560,000, sign a promissory note, and assign the entire receivable balance as collateral, At the end of each month, a remittance will be made to the bank that equals the amount of receivables collected plus 9% interest on the unpald balance of the note at the beginning of the period. b. Transfer $580,000 of specific receivables to the bank without recourse. The bank will charge a 4% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criteria are met. Required: 1. Prepare the journal entries that would be recorded on July 1 for: a. alternative a. b. alternative b. 2. Assuming that 80% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the coliection and the remittance to the bank for: a. alternative a. b. alternatlve b. Prepare the journal entry that would be recorded on July 1 for alternative a. Note: if no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the borrowing $560,000, sign a note payable, and assign the entire receivable balance as collateral. Note: Enter debits before credits. Prepare the journal entry that would be recorded on July 1 for alternative b. Note: If no entry is required for a transaction/event, select. "No joumal entry required" in the first account field. Journal entry worksheet Record the transfer $580,000 of specific receivables to the bank without recourse. The bank will charge a 4% factoring fee on the amount of receivables transferred: Note: Enter debits before credits. Assuming that 80% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the the remittance to the bank for alternative a. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the collection of receivables, assuming that 80% of all June 30 receivables are collected on July 31. Note: Enter debits before credits. Assuming that 80% of all June 30 receivables-are collected during July, prepare the necessary journal entry to record the colle the remittance to the bank for alternative b. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the collection of receivables, assuming that 80% of all June 30 receivables are collected on July 31 . The bank will collect the transferred receivables directly. Note: Enter debits before credits

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