The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.
The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.
The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.
The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.
Transcribed Image Text:The following information is related to ABC Co.:
1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee
at a financing charge of 9%. Cash is received for the proceeds; collections are handled by
the finance company.
2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as
security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The
finance company will make the collections.
Required:
Prepare all necessary entries in general journal form for ABC Co.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
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