Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 9, Problem 9.10E
Assigning Receivables, Factoring Receivables. Sawyer’s Fence Company borrowed $240,000 from Hannibal Capital by issuing a 3-year (36-month), 6% note payable. Sawyer’s uses $270,000 of its
Required
- a. Determine whether Sawyer’s borrowing from Hannibal would be treated as a borrowing or sale under U. S. GAAP. Prepare any
journal entries needed at the initiation of the arrangement. - b. Prepare the journal entries to record the collection of the receivables and the payment to Hannibal.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Cullumber Inc. assigns $4728000 of its accounts receivables as collateral for a $3.30 million loan with a bank. The bank assesses a 3%
finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction?
O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Accounts Receivable for $3300000
O Debit Cash for $3003000, debit Interest Expense for $297000, and credit Notes Payable for $3300000
O Debit Cash for $1890800, debit Interest Expense for $99000, debit Due from Bank for $1428000, and credit Accounts
Receivable for $4728000
O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Notes Payable for $3300000
On November 1, 2018, an entity borrowed P1,000,000 from Universe Global Bank and issued a promissory note for the same.
The term of the loan is one year and discounted at 12%. The entity pledged accounts receivable of P2,000,000 to secure the loan.
On November 1, 2018, what is the entry to record the pledge of accounts receivable?
a. No entry needed
b. Credit to accounts receivable, P880,000
c. Credit to accounts receivable, P1,000,000
d. Credit to accounts receivable, P2,000,000
Accounting
A Corp. required additional cash for its operation and used its accounts
receivable to raise such needed cash, as follows:
On December 1, 2021, A Corp. assigned on a non-notification basis accounts
receivable of P10,000,000 to a bank in consideration for a loan of 60% of the
receivables less a 1% service fee on the accounts assigned. A signed a note for
the bank loan.
On December 31, 2021, A collected assigned accounts of P5,000,000 less
discount of P100,000. A remitted the collections to the bank in partial payment
for the loan. The bank applied first the collection to the interest and the balance
to the principal. The agreed interest is 2% per month on the loan balance.
A received an advance of P400,000 from Job Financial Co. by pledging
P500,000 of accounts receivable. The loan is due in five years.
On December 31, 2021, A discounted at a bank a customer's P3,000,000, 1 year,
10% note receivable dated April 30, 2021. The bank discounted the note at 15%
on the same date.…
Chapter 9 Solutions
Intermediate Accounting (2nd Edition)
Ch. 9 - Prob. 9.1QCh. 9 - Do companies always classify cash as a current...Ch. 9 - Prob. 9.3QCh. 9 - Do accountants typically measure accounts...Ch. 9 - Under the allowance method, will the actual...Ch. 9 - How does an entity record a subsequent recovery of...Ch. 9 - Does the aging of accounts receivable method of...Ch. 9 - What is the difference between pledging accounts...Ch. 9 - How do companies account for receivables that are...Ch. 9 - Is the face value of a note receivable exchanged...
Ch. 9 - What do firms use to record the sales value of a...Ch. 9 - Explain why a company must have highly effective...Ch. 9 - The following are held by YRT Corporation at...Ch. 9 - Fernandez Company had an accounts receivable...Ch. 9 - On its December 31, Year 2, balance sheet, Red...Ch. 9 - Stanberry Company sold 500,000 of net accounts...Ch. 9 - On November 30, Year 1, Derin Corporation agreed...Ch. 9 - Which of the following disclosures about accounts...Ch. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Prob. 9.3BECh. 9 - Prob. 9.4BECh. 9 - Prob. 9.5BECh. 9 - Sales Discounts, Most-Likely-Amount Method. On...Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Recovery....Ch. 9 - Bad Debt Expense, Journal Entry. Paul Anchor...Ch. 9 - Bad Debt Expense. Journal Entry. Paul Anchor,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.14BECh. 9 - Prob. 9.15BECh. 9 - Assigned Receivables. Using the information...Ch. 9 - Factoring Receivables without Recourse. Nicks...Ch. 9 - Prob. 9.18BECh. 9 - Notes Receivable. Welk Associates sold a piece of...Ch. 9 - Prob. 9.20BECh. 9 - Prob. 9.21BECh. 9 - Prob. 9.22BECh. 9 - Internal Controls. Identify whether the following...Ch. 9 - Prob. 9.24BECh. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - Prob. 9.1ECh. 9 - Volume Discounts, Sales Discounts. Sodesta Company...Ch. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Write-Offs, Journal Entry....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Percentage of Accounts...Ch. 9 - Prob. 9.9ECh. 9 - Assigning Receivables, Factoring Receivables....Ch. 9 - Prob. 9.11ECh. 9 - Factoring Receivables with and without Recourse....Ch. 9 - Factoring Receivables without Recourse, Factoring...Ch. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Notes Receivable with Year-End Interest Accrual,...Ch. 9 - Prob. 9.18ECh. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Prob. 9.2PCh. 9 - Allowance for Uncollectible Accounts, Aging of...Ch. 9 - Prob. 9.4PCh. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.7PCh. 9 - Prob. 9.8PCh. 9 - Aging of Accounts Receivable, Write-Offs,...Ch. 9 - Disclosure. Using the transactions listed in P9-9,...Ch. 9 - Accounts Receivable Disclosure. Using Kellogg...Ch. 9 - Prob. 1JCCh. 9 - Financial Statement Analysis Case: Revlon The...Ch. 9 - Prob. 1SSCCh. 9 - Surfing the Standards Case 2: Costs Associated...Ch. 9 - Prob. 1BCC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expensearrow_forwardA customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?arrow_forwardVKS Co. assigned P 4,000,000 of accounts receivables as collateral for a P1,500,000 5% loan with a bank. The entity was also assessed by the bank a finance charge of 6% on the transaction and is paid up front. What amount should be recorded as a gain or loss on the transfer of accounts receivables?arrow_forward
- 54. CPA Company assigned P 4,000,000 of accounts receivables as collateral for a P1,500,000 5% loan with a bank. The entity was also assessed by the bank a finance charge of 6% on the transaction and is paid up front. What amount should be recorded as a gain or loss on the transfer of accounts receivables?arrow_forwardYou are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) Amount Financed Number of Monthly Payments Rebate Payments Payment Made Fraction Finance Charge Rebate $4,700 36 $167.33 29 15/666 X $85.76 Loan Payoff X $ 785.89 Xarrow_forwardPrepare the journal entries to record the transactions on the books of Audrey Company.arrow_forward
- Adobo Company assigned P 4,000,000 of accounts receivables as collateral for a P1,500,000 5% loan with a bank. The entity was also assessed by the bank a finance charge of 6% on the transaction and is paid up front. What amount should be recorded as a gain or loss on the transfer of accounts receivables?arrow_forwardCan you pleace check what answer and solution is correct for the letter c. 1st answer is 552,000 and the other one is 300,000. Note: 1st image is the solution for letter a and b On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000. a bank in consideration for a loan of 80% of the What is the balance of accounts receivable assigned on December 31, 2020? b. In the preceding problem,…arrow_forwardPlease show work. On July 1 of the current year, Rio Bravo factored receivables with a carrying value of $250,000 to a local bank. The transfer was made with a recourse of $3000. The bank assesses a finance charge of 3% of the amount of accounts receivable and retains an amount equal to 5% of the accounts receivable (for probable adjustments). The journal entry for this transaction will include which of the following? A. Debit to Recourse Liability of $3,000 B. Debit to Cash of $233,000. C. Debit to Due from Bank of $15,500. D. Debit to Loss on Sale of Receivables of $10,500. E. Mor than one of these.arrow_forward
- Global Inc. assigns $3,000,000 of its accounts receivables as collateral for a $2,000,000, 8%, loan with a bank. Global Inc. also pays a finance charge of 3% of the account receivable. What would be the journal entry to record the transaction? 1,940,000 60,000 а. Cash Finance Charge Notes Payable 2,000,000 b. Cash 1,910,000 90,000 Finance Charge Accounts Receivable 2,000,000 с. Cash 1,910,000 90,000 Finance Charge Notes Payable 2,000,000 d. Cash 1,940,000 30,000 30,000 Finance Charge Due from Bank Notes Payable 2,000,000arrow_forwardQ.No.4. Following are the transactions given, you are required to pass Journal Entries for each and every transaction.o A bank loans the Business named, ABC Company ,$1,020,000; o The note has a 15% interest rate, payable quarterly to the bank.o ABC wires funds to the bank to pay for the interest expense, o On the date specified in the agreement, ABC pays the $1,020,000 loan back to the lender.o The Business Purchases made from Salim and Co. worth of $12000o Salim and Co. retuned defective goods worth of 500 Dollarso The Business Sold goods for $ 10,000 for casho Few goods were returned back to the business worth of 300 Dollarso The Business paid rent worth of $ 500o The Business paid salaries worth of $ 5,000arrow_forwardOn September 1, QUEROL COMPANY assigns specific receivables totaling P750,000 to Davao Bank as collateral on a P625,000, 12% note. QUEROL COMPANY will continue to collect the assigned accounts receivable. Davao Bank also assesses a 2% service charge on the total accounts receivable assigned. QUEROL COMPANY is to make monthly payments to Davao Bank with cash collected on assigned accounts receivable. Collections of assigned accounts during September totaled P260,000 less cash discounts of P3,500. 23. What were the proceeds from the assignment of QUEROL COMPANYs’ accounts receivable on September 1? 24. What amount is owed to Davao Bank by QUEROL COMPANY for September collections plus accrued interest on the note to September 30?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY