On May 31,a Company Had a Balance in Its Accounts

question 94

Essay

On May 31,a company had a balance in its accounts receivable of $103,895.Prepare the company's following transactions for June.
$$\begin{array} { | l | l | } \hline \text { June } 2 & \text { Sold merchandise on account, } \$ 14,000 \\\hline \text { June 8 } & \begin{array} { l } \text { Sold } \$ 15,000 \text { worth of accounts receivable to First Bank. First Bank charged a } \\\text { 3\% factoring fee. }\end{array} \\\hline \text { June } 20 & \begin{array} { l } \text { Barrowed } \$ 30,000 \text { cash from First Bank, pledging } \$ 31,500 \text { wath of accounts } \\\text { receivable as collateral for the loan. }\end{array} \\\hline\end{array}$$

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Definitions:

J.P. Morgan

An influential American banker and financier who played a significant role in the development of the United States' financial system by financing railroads and helping to organize U.S. Steel, General Electric, and other major corporations.

Banking Syndicate

A group of banks that come together to jointly finance a large project or loan, sharing the risk.

Economic Depression

A long-term downturn in economic activity characterized by high unemployment, low consumer spending, and a decline in industrial output.

Staggering

Astonishing or deeply shocking in scale, magnitude, or degree.