Accounts Receivable Assigned. Prepare Journal Entries for Mars Co. For

question 36

Essay

Accounts receivable assigned.
Prepare journal entries for Mars Co. for:
(a) Accounts receivable in the amount of $1,000,000 were assigned to Utley Finance Co. by Mars as security for a loan of $850,000. Utley charged a 3% commission on the accounts; the interest rate on the note is 12%.
(b) During the first month, Mars collected $400,000 on assigned accounts after deducting $900 of discounts. Mars wrote off a $1,060 assigned account.
(c) Mars paid to Utley the amount collected plus one month's interest on the note.(d) Explain the differences in accounting for a secured borrowing and a sale of receivables.

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Definitions:

Reframing

Changing the perspective or context of a situation to view it in a different light and find new solutions.

Regurgitating

The act of repeating information without understanding or analysis.

Rewinding

Refers to the process of winding back or reversing something, such as a videotape or audio cassette, to a previous point.

Contentious

Contentious involves being prone to arguments, disputes, or conflict, often marked by heated disagreements.