Question
On April 1, 2014, Rasheed Company assigns $540,400 of its accounts receivable to the Third National Bank as collateral for a $346,000 loan due July
On April 1, 2014, Rasheed Company assigns $540,400 of its accounts receivable to the Third National Bank as collateral for a $346,000 loan due July 1, 2014. The assignment agreement calls for Rasheed Company to continue to collect the receivables. Third National Bank assesses a finance charge of 2% 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, 2014, journal entry for Rasheed Company.
Date | Account Titles and Explanation | Debit | Credit |
april 1?2014 __________________________ _____ _____
__________________________ _____ _____
__________________________ _____ _____
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