The trial balance before adjustment for Bassel Company shows the following balances. The following cases are independent:
Question:
The trial balance before adjustment for Bassel Company shows the following balances.
The following cases are independent:
1. To obtain cash, Bassel factors without recourse $20,000 of receivables with Anila Finance. The finance charge is 10% of the amount factored.
2. To obtain a one-year loan of $55,000, Bassel assigns $65,000 of specific accounts receivable to Ruddin Financial. The finance charge is 8% of the loan; the cash is received.
3. The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable.
4. The company wishes to increase the allowance account by 11/2% of sales.
Instructions
Using the data above, prepare the journal entries to record each of the above cases.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy