Valix Finacc vol 1 Problem 6-7

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 6-7

July   1   Accounts receivable – assigned                                            500,000

                       Accounts receivable                                                                            500,000

         1   Cash (400,000 – 10,000)                                                          390,000

              Service charge (2% x 500,000)                                                  10,000

                       Note payable – bank                                                                           400,000

Aug. 1   Cash                                                                                       330,000

                       Accounts receivable – assigned                                                          330,000

         1   Interest expense (1% x 400,000)                                                 4,000

              Note payable – bank                                                                        326,000

                       Cash                                                                                                     330,000

                                                    

Sept. 1   Cash                                                                                      170,000

                       Accounts receivable – assigned                                                          170,000

         1   Interest expense (1% x 74,000)                                                      740

              Note payable – bank                                                                          74,000

                       Cash                                                                                                       74,740