On August 1, a firm assigned $220,000 of its $580,000 of accounts receivable. The finance company advances 85% of the assigned accounts less a $22,000 fee. Interest is 10% and payable monthly on the beginning-of-period loan balance. A loan payment is remitted at the end of each month. Each payment includes principal and interest. The amount of each loan payment equals the cash collected on receivables during the month plus interest on the loan balance. If $100,000 was collected on accounts receivable during August, on the first loan payment, how much should be debited to Interest Expense?
On August 1, a firm assigned $220,000 of its $580,000 of accounts receivable. The finance company advances 85% of the assigned accounts less a $22,000 fee. Interest is 10% and payable monthly on the beginning-of-period loan balance. A loan payment is remitted at the end of each month. Each payment includes principal and interest. The amount of each loan payment equals the cash collected on receivables during the month plus interest on the loan balance. If $100,000 was collected on accounts receivable during August, on the first loan payment, how much should be debited to Interest Expense?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On August 1, a firm assigned $220,000 of its $580,000 of
If $100,000 was collected on accounts receivable during August, on the first loan payment, how much should be debited to Interest Expense?
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