Show how the preceding information would be reported

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Problem - Secured Borrowing: Assigning Accounts Receivable - Furman Corporation entered into an assignment agreement with a finance company whereby Furman would be advanced 80% of all accounts assigned, minus a $2,000 service charge. The assignment does not meet the conditions for a sale and should be accounted for as a secured borrowing. During the year, $300,000 of accounts receivable were assigned, $220,000 collections were made on outstanding assigned accounts, and $210,000 was remitted to the finance company. This remittance included interest charges of $2,100. Sales returns and allowances on assigned accounts amounted to $5,000.

Required -

1. Prepare the journal entries necessary to record the preceding information.

2. Show how the preceding information would be reported on Furman's year-end balance sheet (assume the note payable is short-term).

Reference no: EM132882121

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