Accounts Receivable Assigned Moonbeam Ltd

question 415

Essay

Accounts receivable assigned Moonbeam Ltd.assigned $520,000 of their accounts receivable to the Sunbright Finance Company, as security for a loan of $430,000.Sunbright charged a 3.5% commission on the face amount of the loan, and the note bears interest at 9%. During the first month, Moonbeam collected $260,000 on assigned accounts.This amount was paid to the finance company along with one month's interest on the note. Instructions Prepare the required journal entries on Moonbeam's books related to the transfer of the accounts receivable, the loan, and the payment to the finance company.

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Definitions:

Institutional Investors

Entities such as pension funds, insurance companies, and endowments that invest large amounts of money into securities and real estate.

Politically Vulnerable

Referring to entities or individuals that may face extra scrutiny, risks, or impacts based on political movements, decisions, or conflicts.

Anticompetitive Business Practices

Business actions that prevent or reduce competition in a market, often seen as unfair or unethical.

Financial Strength

An indicator of the stability and health of a company's financial condition, often assessed through metrics such as equity, debt levels, and liquidity ratios.