On April 1, Z&T Enterprises executes a $500,000 note payable to Turow Bank to borrow cash.

Z&T assigns $600,000 of their Accounts Receivable as collateral on the note

Turow Bank charges Z&T a finance charge of .5% (.005) of the Accounts Receivable when the loan originates

Z&T must remit net cash collections from Accounts Receivable monthly, as well as any accrued interest at 8% until the loan is repaid

April: Z&T collected $200,000 of Accounts Receivable

May: Z&T collected $250,000 of Accounts Receivable

June: Z&T collected $120,000 of Accounts Receivable

Prepare JEs for Z&T for the life of the note, including the cash collections.

Answer rating: 100% (QA)

Prefae Journal entries for Z BT Z Account Allounts Payable Cash Finance charg... View the full answer