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What is the amount of the loan from factor

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Reference no: EM131939068

Question - Entity A has an outstanding receivables balance with a major customer amounting to $12,000,000 and this was factored to Finance Limited on 1 Sep 2017. Finance Limited will pay 80% of the gross receivable outstanding account to Entity A immediately.

The terms of the factoring were:

• Any amount of the debt outstanding after six months will be transferred back to Entity A at its full book value.

• Finance Limited does not take any risk of bad debts.

• Finance Limited will charge 2% per month of the net amount owing from Entity A at the end of each month.

Finance Limited had not collected any of the factored receivable amount on 30 Sep 2017.

The end of the reporting period is 30 Sep.

What is the amount of the Loan from Factor on Entity A's Statement of Financial Position as at 30 Sep 2017?

What is the amount of the Interest Payable on Entity A's Statement of Financial Position as at 30 Sep 2017?

Reference no: EM131939068

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