On October 1, 2020, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank
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On October 1, 2020, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank as collateral for a $2.6-million loan evidenced by a note. The bank’s charges are as follows:
a finance charge of 4% of the assigned receivables and an interest charge of 10% on the loan. Prepare the October 1 journal entries for both Alpha Inc. and Alberta Provincial Bank.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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