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    Receivable Financing

    Uploaded by

    Hannah Pearl Flores Villar
    The document outlines journal entries for receivable financing transactions. It shows entries for: 1) Obtaining a bank loan secured by accounts receivable and making loan payments over time. 2) Factoring receivables, where a company assigns accounts receivable to a factor in exchange for immediate cash, less fees. The factor then collects payment from customers. 3) Discounting receivables without recourse, where a company obtains immediate cash from a bank by discounting receivables at a fee, and the bank bears the risk of non-payment.

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    © All Rights Reserved
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    Receivable Financing

    Uploaded by

    Hannah Pearl Flores Villar
    19 views8 pages
    The document outlines journal entries for receivable financing transactions. It shows entries for: 1) Obtaining a bank loan secured by accounts receivable and making loan payments over time. 2) Factoring receivables, where a company assigns accounts receivable to a factor in exchange for immediate cash, less fees. The factor then collects payment from customers. 3) Discounting receivables without recourse, where a company obtains immediate cash from a bank by discounting receivables at a fee, and the bank bears the risk of non-payment.

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    RECEIVABLE FINANCING

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    The document outlines journal entries for receivable financing transactions. It shows entries for: 1) Obtaining a bank loan secured by accounts receivable and making loan payments over time. 2) Factoring receivables, where a company assigns accounts receivable to a factor in exchange for immediate cash, less fees. The factor then collects payment from customers. 3) Discounting receivables without recourse, where a company obtains immediate cash from a bank by discounting receivables at a fee, and the bank bears the risk of non-payment.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    19 views8 pages

    Receivable Financing

    Uploaded by

    Hannah Pearl Flores Villar
    The document outlines journal entries for receivable financing transactions. It shows entries for: 1) Obtaining a bank loan secured by accounts receivable and making loan payments over time. 2) Factoring receivables, where a company assigns accounts receivable to a factor in exchange for immediate cash, less fees. The factor then collects payment from customers. 3) Discounting receivables without recourse, where a company obtains immediate cash from a bank by discounting receivables at a fee, and the bank bears the risk of non-payment.

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    © All Rights Reserved
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    You are on page 1of 8

    RECEIVABLE FINANCING

    Journal Entries

    March 1 Cash 2,000,000


    Note Payable - bank

    April 1 Cash 980,000


    Sales Discount 20,000
    Accounts Receivable

    June 1 Cash 2,000,000


    Accounts Receivable

    Sept 1Note Payable - bank 2,000,000


    Interest Expense (12% x 2,000,000 x 6/12) 120,000
    Cash

    Requirement 1
    2020
    Oct 1 Cash 3,600,000
    Discount on Note Payable - bank (10% x 4,000,000) 400,000
    Note Payable - bank

    Oct 1 Interest Expense (400,000 x 3/12) 100,000


    Discount on Note Payable
    2021
    Oct 1 Note Payable -bank 4,000,000
    Cash

    Dec 31 Interest Expense 300,000


    Discount on Note Payable

    Journal Entries
    July 1 Accounts Receivable - assigned 500,000
    Accounts Receivable

    July 1 Cash (400,000 - 10,000) 390,000


    Service Charge (2% x 500,000) 10,000
    Note Payable - bank

    Aug 1 Cash 330,000


    Accounts Receivable - assigned

    Aug 1 Interest Expense (1% x 400,000) 4,000


    Note Payable - bank 326,000
    Cash

    Sept 1Cash 170,000


    Accounts Receivable - assigned

    Sept 1Interest Expense (1% x 74,000) 740


    Note Payable - bank 74,000
    Cash

    Journal Entries

    July 1 Cash 680,000


    Service Charge (5% x 800,000) 40,000
    Receivable from factor (10% x 800,000) 80,000
    Accounts Receivable

    July 15 Sales Return and Allowances 20,000


    Receivable from factor

    July 31 Cash (80,000 - 20,000) 60,000


    Receivable from factor
    2,000,000

    1,000,000

    2,000,000

    2,120,000

    4,000,000

    100,000

    4,000,000

    300,000
    500,000

    400,000

    330,000

    330,000

    170,000

    74,740

    800,000

    20,000

    60,000

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