Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) To obtain additional cash, Martinez factors without recourse $29,200 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 1. To obtain a 1-year loan of $57,500, Martinez pledges $71,400 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 2. 3. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,717 should be reported. Assume the allowance has a credit balance of $998.
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) To obtain additional cash, Martinez factors without recourse $29,200 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 1. To obtain a 1-year loan of $57,500, Martinez pledges $71,400 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 2. 3. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,717 should be reported. Assume the allowance has a credit balance of $998.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The image displays a template for recording accounting transactions in a journal format. At the top, there is an instructional note in red text:
"(If no entry is required, select 'No Entry' for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)"
Below the instruction, the table consists of several columns with the following headers:
1. No.
2. Account Titles and Explanation
3. Debit
4. Credit
There are four rows provided for entering transactions, each with empty fields under the columns for entering respective data:
1. The first column is numbered from 1 to 4, signifying the transaction number.
2. The second column is for the account titles and explanations of the transactions.
3. The third column is for entering debit amounts.
4. The fourth column is for entering credit amounts.
This setup is typically used in accounting to ensure accuracy and organization when recording financial transactions.
Transcribed Image Text:The trial balance before adjustment for Martinez Company shows the following balances:
| | Dr. | Cr. |
|---------------|----------|------------|
| Accounts Receivable | $84,600 | |
| Allowance for Doubtful Accounts | | $2,650 |
| Sales Revenue | | $447,400 |
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.)
1. To obtain additional cash, Martinez factors without recourse $29,200 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored.
2. To obtain a 1-year loan of $57,500, Martinez pledges $71,400 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial.
3. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable.
4. Based on an aging analysis, an allowance of $5,717 should be reported. Assume the allowance has a credit balance of $998.
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