Agreement calls for blue to continue to collect receivables

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Reference no: EM131264906

On April 1, 2017, Blue Company assigns $549,400 of its accounts receivable to the Third National Bank as collateral for a $301,600 loan due July 1, 2017. The assignment agreement calls for Blue to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2017, journal entry for Blue Company. (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.) Prepare the journal entry for Blue’s collection of $357,200 of the accounts receivable during the period from April 1, 2017, through June 30, 2017. (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.) On July 1, 2017, Blue paid Third National all that was due from the loan it secured on April 1, 2017. Prepare the journal entry to record this payment. (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.)

Reference no: EM131264906

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Agreement calls for blue to continue to collect receivables : On April 1, 2017, Blue Company assigns $549,400 of its accounts receivable to the Third National Bank as collateral for a $301,600 loan due July 1, 2017. The assignment agreement calls for Blue to continue to collect the receivables.

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