Question
On December 1, 2019, Matilda Company assigned on a non-notification basis accounts receivable of P3,000,000 to a bank in consideration for a loan of 80%
On December 1, 2019, Matilda Company assigned on a non-notification basis accounts
receivable of P3,000,000 to a bank in consideration for a loan of 80% of the receivables less
a 5% service fee on the accounts assigned. The interest rate of the loan is 12% per annum.
The company collected assigned accounts of P2,000,000 and remitted the collections to the
bank in partial payment for the loan. The bank applied first the collection to the interest
and the balance to the principal. The interest rate is 1% per month on the outstanding
balance of the loan.
In its December 31, 2019 balance sheet, what amount of note payable should Matilda report
as a current liability?
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