On October 1, 2017 Chung. Inc. assigns $1,000,000 of its accounts receivable to Seneca National bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9% Prepare the Journal entry for Seneca National Bank

On October 1, 2017 Chung. Inc. assigns $1,000,000 of its accounts receivable to Seneca National bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9% Prepare the Journal entry for Seneca National Bank

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On October 1, 2017 Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National bank as collateral for a $750,000 note. The bank assesses a finance charge of
2% of the receivables assigned and interest on the note of 9%
Prepare the Journal entry for Seneca National Bank
Cash
730,000
O Interest Expense
Notes Payable
20,000
750,000

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