Chapter 1 Problem 6-6
July 1 Accounts receivable – assigned 1,500,000
Accounts receivable 1,500,000
July 1 Cash (1,125,000 – 60,000) 1,065,000
Service charge (4% x 1,500,000) 60,000
Note payable – bank 1,125,000
Aug. 1 Note payable – bank 800,000
Accounts receivable – assigned 800,000
1 Interest expense (2% x 1,125,000) 22,500
Cash 22,500
Sept. 1 Cash 168,500
Interest expense 6,500
Note payable – bank 325,000
Accounts receivable – assigned 500,000
Accounts receivable 200,000
Accounts receivable – assigned 200,000
Collections by bank 500,000
Less: Payment of loan (1,125,000 – 800,000) 325,000
Excess collection 175,000
Less: Interest (2% x 325,000) 6,500
Cash remittance from bank 168,500
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