1. Pittance Company provided the following information connection with a bank loan. in March 1 Pittance Company...
Question:
1. Pittance Company provided the following information connection with a bank loan. in
March 1 Pittance Company borrowed P2,000,000 from bank on a six-month note carrying an interest of 12% per annum. Accounts of P3,000,000 are pledged to secure the loan.
April 1 Pledged accounts of P1,000,000 are collected minus 2% discount.
June 1 The remaining pledged accounts are collected.
Sept. 1 The bank loan is repaid plus interest.
Required:
Prepare journal entries to record the transactions.
2 Idealist Company secured a one-year bank loan of P4,000,000 on October 1, 2021. The loan was discounted at 10%.
The entity signed a note for the loan and pledged P5,000,000 of its accounts receivable as collateral for the same. The accounting period of the entity ends on December 31.
Required:
1. Prepare journal entries, including adjustment from the date of loan up to date of maturity.
2. Statement presentation of the bank loan with adequate disclosure on December 31, 2021.
3 Savior Company provided the following transactions:
May 1 Elegant Company assigned P800,000 of accounts receivable to a bank in consideration for a loan.
A cash advance of 80% less service charge of P20,000 was made by the latter.
It was agreed that interest of 2% per month is to be made and that the assignor continues to make the collections. The entity signed a promissory note for the loan.
May 5 The entity issued a credit memo to a customer for returned merchandise, P30,000. The account is one of the assigned accounts.
May 10 Collections of P500,000 of the assigned accounts were made, less 2% discount.
June 1 Remitted the collections to the bank plus 2% interest for one month.
June 7 Assigned accounts of P10,000 proved to be worthless.
June 20 Collections of P200,000 for the accounts assigned were made.
July 1 Final settlement was made with the bank. Elegant Company accordingly remitted the total amount due the bank to pay off the loan plus interest charge.
Required:
Prepare journal entries to record the transactions.
4 Docile Company assigned certain accounts receivable to a bank for a loan on the following basis: 75% cash advance, 4% service charge on gross accounts assigned, 2% interest per month is to be charged, and the bank makes the collections. The entity signed a promissory note for the loan.
July 1 Received remittance upon the specific assignment of P1,500,000 in accounts to the bank.
Aug. 1 Received notice from bank that P800,000 of the assigned accounts were collected. A check was sent to the bank for one month interest charge.
Sept. 1 Received notice from bank that assigned accounts of P500,000 were collected in full and the remaining accounts of P200,000 were being returned. Accordingly, a check was received from the bank in settlement of the assignment contract. In making the settlement, the bank deducted the interest charge for the corresponding period.
Required:
Prepare journal entries on the books of the assignor.
5 Grateful Company provided the following transactions:
July 1 The entity assigned P500,000 of accounts receivable to its bank on a non notification basis in consideration for a loan. On this date, the bank advanced P400,000 less a service charge of 2% of the total accounts assigned, and the entity signed a promissory note bearing interest of 1% per month on the unpaid loan balance at the beginning of the month.
Aug. 1 Collected P330,000 on assigned accounts. The entity remitted this amount to the bank in payment first for the interest and the balance to the principal.
Sept. 1 Collected the remaining balance of assigned accounts. The entity paid off the remaining loan balance..
Required:
Prepare journal entries to record the transactions
Expert Answer:
Question 1 Pittance Company Date Account Debit Credit March 1 Cash 2000000 Bank Loan Payable 2000000 ... View the full answer
