Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On 6/1/20, accounts receivable in the amount of $300,000 were assigned to the Perch Finance Company by Bass, Inc., as security for a loan of

On 6/1/20, accounts receivable in the amount of $300,000 were assigned to the Perch Finance Company by Bass, Inc., as security for a loan of $250,000. The finance company charged a 5% commission on the face amount of the loan, and the note bears interest at 9%. Perch is to remit cash collected on the accounts, along with interest, at the end of each month until the note is repaid.

During the month of June, Bass received returns of $10,000 and collected $160,000 on the assigned accounts, after discounts of $3,000. In July, another $80,000 was collected, and another $40,000 was collected in August. At 8/31/20, Bass determined that no further collections would be made.

Required:

(a) Make all the entries required on Bass's books associated with the assignment of the accounts on 6/1/20.

(b) Make any entries required by Bass on 6/30, 7/31, and 8/31.

Please show work! Thank you in advance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Statistical Audit Automation Applying Computer Assisted Audit Techniques

Authors: Edward J. Winslow

1st Edition

1973281015, 978-1973281016

More Books

Students also viewed these Accounting questions

Question

=+14.4. 1 Let C be the set of continuity points of F.

Answered: 1 week ago