Vain Company

Requirement: Prepare journal entries on the books of assignor Debit Credit

Jul-01 Accounts receivable - assigned 800,000

Accounts receivable 800,000

1 Cash (640,000-24,000) 616,000

Service charge )3%*800,000) 24,000
Notes payable - bank 640,000

Aug-01 Interest expense (1%*640,000) 64,000

Notes payable - bank 413,600
Accounts receivable - assigned 420,000

Sep-01 Cash 91,336

Interest expense 2,264
Notes payable - bank 226,400
Accounts receivable - assigned 320,000

Accounts receivable 60,000

Accounts receivable - assigned 60,000

Bank loan 640,000

August 1 payment 413,600
Balance 226,400

Collection by bank 320,000

Less: Payment of loan 226,400
Intereset (1%*226,400) 2,264 228,664
Remittance from bank 91,336