On September 1, Riva Co. assigns specific receivables totaling $750,000 to Pacific Bank as collateral on a $625,000, 12 percent note. Riva Co. will continue to collect the assigned accounts receivable. Pacific also assesses a 2 percent service charge on the total accounts receivable assigned. Riva Co. is to make monthly payments to Pacific with cash collected on assigned accounts receivable. Collections of assigned accounts during September totaled $260,000 less cash discounts of $3,500. What amount is owed to Pacific by Riva Co. for September collections plus accrued interest on the note to September 30?

Please help me with this problem, how do we calulate and write it up. :confused:

This question relates to assignment of accounts receivable. I will give you the entries, you can fill out the figures.
September 1
Debit Bank (98%)
Debit Finance charges (2%)
Credit Pacific Bank (100%)
To record funds provided by bank

Debit Accounts receivable assigned
Credit accounts receivable

September 30
Debit Cash
Debit Discount allowed
Credit accounts receivable assigned

Debit Interest expense (1%)
Debit Pacific Bank (99%)
Credit Cash

This should help you to complete the answer.