lai502
Nov 6, 2008, 02:17 PM
Please help on this homework question:
On 6/1/08, accounts receivable in the amt of $300,000 were assigned to the Perch Finance Company by Bass, Inc., as a security for a loan of $250,000. The finance company charged a 5% commission on the face amt of the loan, and the note bears interest at 9%. Perch is to remit amts collected on the accounts, along with interest, at the end of each month until the note is repaid.
During the month of June, Bass received returns of $10,000 and collected $160,000 in the assigned accounts, after discounts of $3,000. In July, another $80,000 was collected, and another $40,000 was collected in August. At 8/31/08, Bass determined that no further collections would be made.
a. make all entries required on Bass's books associated with the assignment of the accounts on 6/1/08,
b. make any entries required by Bass on 6/30, 7/31, 8/31
On 6/1/08, accounts receivable in the amt of $300,000 were assigned to the Perch Finance Company by Bass, Inc., as a security for a loan of $250,000. The finance company charged a 5% commission on the face amt of the loan, and the note bears interest at 9%. Perch is to remit amts collected on the accounts, along with interest, at the end of each month until the note is repaid.
During the month of June, Bass received returns of $10,000 and collected $160,000 in the assigned accounts, after discounts of $3,000. In July, another $80,000 was collected, and another $40,000 was collected in August. At 8/31/08, Bass determined that no further collections would be made.
a. make all entries required on Bass's books associated with the assignment of the accounts on 6/1/08,
b. make any entries required by Bass on 6/30, 7/31, 8/31