On December 1, 2019, Jake Company signed specific accounts receivable totaling P 2,000,000

as collateral on a P 1,500,000, 12 % note from a certain bank. The entity will continue to collect
the assigned accounts receivable. In addition to the interest on the note, the bank also charged
a 5% finance fee deducted in advance on the P 1,500,000 value of the note. The December
collections of assigned accounts receivable amounted to P 1,000,000 less cash discount of P
50,000. On December 31, 2019, the entity remitted the collections to the bank in payment for
the interest accrued on Dec 31, 2019 and the note payable.
1.What amount of cash was received from the assignment of accounts receivable on December
1, 2019?
2. What is the carrying amount of note payable on December 31 2019?
3. What amount should be disclosed as the equity of Irene Company in the assigned accounts
on Dec 31, 2019?

Jennie factored P 6,000,000 of accounts receivable to a finance entity on October 1, 2019.

Control was surrendered by Jennie Company. The factor assessed a fee of 3% and retained a
holdback equal to 5% of the accounts receivable. In addition, the factor charged 15% interest
computed on a weighted average time to maturity of the accounts receivable of 54 days.
4.What is the amount of cash initially received from the factoring?
5.If all accounts are collected, what is the cost of factoring the accounts receivable?

Unoemilio Company received from a customer a one-year P 500,000 note bearing annual
interest of 8%. After holding the note for 6months, the entity discounted the note without
recourse at 10%.
6.What amount of cash was received from the bank?
7.What is the loss on note receivable discounting?

On July 1, 2019, Chicken legs company sold goods in exchange for P 2,000,000, 8 month,
noninterest bearing note receivable. At the time of the sale, the market rate of interest was 12%.
The entity discounted the note at 10% on Sept 1, 2019
8. What is the cash received from discounting?
9. What is the loss on note receivable discounting?

10.Lisa Company discounted its own P 5,000,000 one year note at a discount rate of P 12%
when the prime rate was 10%. In reporting the note prior to maturity, what rate should be used
for the recording of interest expense?