Part C 9 marks

Prepare journal entries for Tanzania Inc. for:

a) Accounts receivable of $700,000 that were assigned to Chad Finance Co. by Tanzania as security for a loan of $580,000. Chad charged a 4% commission on the value of the accounts receivable; the interest rate on the note is 11%.

b) During the first month, Tanzania collected $300,000 on assigned accounts. As well, Tanzania wrote off a $1,100 assigned account as a bad debt.

c) Tanzania paid Chad the amount collected plus one month's interest on the note.