Mars paid to utley amount collected plus one month

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Reference no: EM13130797

Prepare journal entries for Mars Co. for:

(a) Accounts receivable in the amount of $1,000,000 were assigned to Utley Finance Co. by Mars as security for a loan of $850,000. Utley charged a 3% commission on the accounts; the interest rate on the note is 12%.

(b) During the first month, Mars collected $400,000 on assigned accounts after deducting $900 of discounts. Mars wrote off a $1,060 assigned account.

Reference no: EM13130797

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