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    Docile Company Requirement: Prepare Journal Entries Debit Credit

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    Anonn
    Docile Company assigned $1.5 million of accounts receivable to a bank in exchange for cash of $1,125,000 less a $60,000 service charge on July 1. In August, $800,000 more of accounts receivable was assigned and $22,500 of interest expense was paid. On September 1, $500,000 of assigned accounts receivable was collected, $325,000 was paid to the bank to pay down the loan, $6,500 of interest was paid, and $168,500 of excess cash was received.

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    Docile Company Requirement: Prepare Journal Entries Debit Credit

    Uploaded by

    Anonn
    2K views1 page
    Docile Company assigned $1.5 million of accounts receivable to a bank in exchange for cash of $1,125,000 less a $60,000 service charge on July 1. In August, $800,000 more of accounts receivable was assigned and $22,500 of interest expense was paid. On September 1, $500,000 of assigned accounts receivable was collected, $325,000 was paid to the bank to pay down the loan, $6,500 of interest was paid, and $168,500 of excess cash was received.

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    Intermediate Accounting1

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    Docile Company assigned $1.5 million of accounts receivable to a bank in exchange for cash of $1,125,000 less a $60,000 service charge on July 1. In August, $800,000 more of accounts receivable was assigned and $22,500 of interest expense was paid. On September 1, $500,000 of assigned accounts receivable was collected, $325,000 was paid to the bank to pay down the loan, $6,500 of interest was paid, and $168,500 of excess cash was received.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    2K views1 page

    Docile Company Requirement: Prepare Journal Entries Debit Credit

    Uploaded by

    Anonn
    Docile Company assigned $1.5 million of accounts receivable to a bank in exchange for cash of $1,125,000 less a $60,000 service charge on July 1. In August, $800,000 more of accounts receivable was assigned and $22,500 of interest expense was paid. On September 1, $500,000 of assigned accounts receivable was collected, $325,000 was paid to the bank to pay down the loan, $6,500 of interest was paid, and $168,500 of excess cash was received.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    Docile Company

    Requirement: Prepare journal entries Debit Credit

    Jul-01 Accounts receivable - assigned 1,500,000


    Accounts receivable 1,500,000

    1 Cash (1,125,000 - 60,000) 1,065,000


    Service charge (4%*1.5m) 60,000
    Notes payable - bank 1,125,000

    Aug-01 Notes payable - bank 800,000


    Accounts receivable - assigned 800,000

    1 Interest expense (2%*1,125,000) 22,500


    Cash 22,500

    Sep-01 Cash 168,500


    Interest expense 6,500
    Notes payable - bank 325,000
    Accounts receivable - assigned 500,000

    Accounts receivable 200,000


    Accounts receivable - assigned 200,000

    Computation of cash on Sept1

    Collection by bank 500,000


    Less: Payment of loan (1,125,000-800k) 325,000
    Excess collection 175,000
    Less: Interest (2%*325,000) 6,500
    Cash remittance from bank 168,500

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