Solution-What amount should be disclosed as the equity

What amount should be disclosed as the equity

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Question - Missandei Company assigned specific accounts receivable totaling 3,100,000 as collateral on a 2,500,000, 12% note from a certain bank on December 1, 2020. The entity will continue to collect the assigned accounts receivable. In addition to the interest on the note, the bank also charged a 5% finance charge deducted in advance on the 2,500,000 value of the note. The December collections of assigned accounts receivable amounted to 1,000,000 less cash discounts of 50, 000. On December 31, 2020, the entity remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable.

Required -

1. What is the carrying amount of note on December 31, 2020?

2. What amount should be disclosed as the equity of Missandei Company in assigned accounts on December 31, 2020?

3. What amount of cash was received from the assignment of accounts receivable on December 1, 2020?

Reference no: EM132836897

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What amount should be disclosed as the equity

Reference no: EM132836897

Reference no: EM132836897

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