On October 1, 2021, COVID Co. borrowed a $500,000 note at 12% interest and pledged $600,000 in accounts receivable as collateral. Additionally, COVID Co. was charged a finance fee equal to 1% of the borrowed amount. At the end of November, $400,000 of the assigned receivables were collected and .remitted to the lender along with accrued interest :Required Prepare journal entries to (A) record the borrowing, the assignment of receivables, (B) the collection on the receivables, and (C) the recognition of interest expense .and remittance to the lender
On October 1, 2021, COVID Co. borrowed a $500,000 note at 12% interest and pledged $600,000 in accounts receivable as collateral. Additionally, COVID Co. was charged a finance fee equal to 1% of the borrowed amount. At the end of November, $400,000 of the assigned receivables were collected and .remitted to the lender along with accrued interest :Required Prepare journal entries to (A) record the borrowing, the assignment of receivables, (B) the collection on the receivables, and (C) the recognition of interest expense .and remittance to the lender
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On October 1, 2021, COVID Co. borrowed a $500,000
note at 12% interest and pledged $600,000 in
accounts receivable as collateral. Additionally, COVID
Co. was charged a finance fee equal to 1% of the
borrowed amount. At the end of November, $400,000
of the assigned receivables were collected and
.remitted to the lender along with accrued interest
:Required
Prepare journal entries to (A) record the borrowing, the
assignment of receivables, (B) the collection on the
receivables, and (C) the recognition of interest expense
.and remittance to the lender
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