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 intereest on the note of 9% Prepare the Journal entry for Chung Inc. Notes Payable 750,000 Interest Expense 20.000 Cash 730,000 Notes Payable O Interest Expense Cash 730,000 20,000 750.000 Cash 730,000 O Interest Expense 20,000 Notes Payable 750,000 750,000 Cash 20,000 Interest Expense Notes Payable 730,000
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 intereest on the note of 9% Prepare the Journal entry for Chung Inc. Notes Payable 750,000 Interest Expense 20.000 Cash 730,000 Notes Payable O Interest Expense Cash 730,000 20,000 750.000 Cash 730,000 O Interest Expense 20,000 Notes Payable 750,000 750,000 Cash 20,000 Interest Expense Notes Payable 730,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On October 1, 2017 Chung, Inc. assigns S1,000,000 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 intereest on the note of 9%
Prepare the Journal entry for Chung Inc.
Notes Payable
750,000
Interest Expense
20,000
Cash
730,000
Notes Payable
O Interest Expense
Cash
730,000
20,000
750,000
Cash
730,000
O Interest Expense
20,000
Notes Payable
750,000
Cash
750,000
Interest Expense
20,000
Notes Payable
730,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8f0b0f2-ea3a-4ad5-a43a-b584eea1f738%2F99757ec1-ae7c-443f-af74-3d1a6515bf87%2Fpdkiu1i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On October 1, 2017 Chung, Inc. assigns S1,000,000 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 intereest on the note of 9%
Prepare the Journal entry for Chung Inc.
Notes Payable
750,000
Interest Expense
20,000
Cash
730,000
Notes Payable
O Interest Expense
Cash
730,000
20,000
750,000
Cash
730,000
O Interest Expense
20,000
Notes Payable
750,000
Cash
750,000
Interest Expense
20,000
Notes Payable
730,000
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