Question 4 Journalizing Various Receivable Transactions

The trial balance before adjustment for Jones Company shows the following balances:

	Dr	Cr
Accounts Receivable	$90,000
Allowance for Doubtful Accounts	2,000
Sales Revenue		$530,000

Instructions: Using the data above, give the journal entries required to record each of the following cases. (Both situations are independent).

To obtain a 1-year loan of $50,000 Jones pledges $70,000 of specific receivable accounts to Smith Financial. The finance charge is 10% of the loan; the cash is received and the accounts turned over to Smith Financial.