Question
Recording a secured borrowing On April 1, 2020, NYC Corporation secures a loan with a finance company, using its accounts receivable of $50,000 as collateral
Recording a secured borrowing
On April 1, 2020, NYC Corporation secures a loan with a finance company, using its accounts receivable of $50,000 as collateral for the loan. NYC Corporation agrees to remit customer collections as payments on the loan. Loan proceeds are 80% of the receivables less a 2% finance charge on the balance of the assigned receivables. In addition, the finance company charges 10% interest on the unpaid loan balance, payable at the end of each month. Record the April 1, 2020, entry for NYC Corporation.
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| April 1 | Cash | ? | ? |
| ? | ? | ? | |
| ? | ? | ? |
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International Accounting A User Perspective
Authors: Suadagaran, Shahrokh M, Smith Lawrence Murphy
5th Edition
1531018661, 9781531018665
