Lopez, Nicole Joy DG.

BSA 1

IA – CLASSWORK RECEIVABLE FINANCING

1. Problem 8-1 Pittance Company – Journal Entry

2015
March 1 Cash P2, 000,000
Note payable – bank P2, 000,000

April 1 Cash P980, 000

Sales discount 20,000
Accounts receivable P1, 000,000

Jun 1 Cash P2, 000,000

Accounts receivable P2, 000,000

Sept Notes payable – bank P2, 000,000

Interest expense 120,000
Cash P2, 120,000

2. Problem 8-2 Idealist Company

A. Journal Entry
2015
Oct 1 Cash P3, 600,000
Discount on note payable 400,000
Note payable – bank P4, 000,000
Interest expense P100,000
Discount on note payable P100, 000

2016
Oct 1 Note payable – bank P400, 000
Cash P400, 000

Dec 31 Interest expense P300, 000

Discount on note payable P300, 000
B. Statement of Financial Position
Idealist Company
Statement of Financial Position
As of year ended December 31, 2015

LIABILITIES AND SHAREHOLDERS’ EQUITY

Currents Liabilities:
Note payable – bank P4, 000,000
Less: discount on note payable (300,000)
Carrying amount P 3,700,000

3. Problem 8-4 Docile Company – Journal Entry

2015
Jul 1 Accounts receivable – assigned P1, 500,000
Accounts receivable P1, 500,000
Cash P1, 065,000
Service charge 60,000
Note payable – bank P1, 125,000
Aug 1 Note payable – bank P800, 000
Accounts receivable – assigned P800, 000

Interest expense P22, 500

Cash P22, 500

Sept 1 Cash P168, 500

Interest expense 6,500
Note payable – bank 325,000
Accounts receivable – assigned P500, 000

Account receivable P200, 000

Account receivable – assigned P200, 000

4. Problem 8-5 Grateful Company – Journal Entry

2015
Jul 1 Accounts receivable – assigned P500, 000
Accounts receivable P500, 000

Cash P390, 000

Service charge 10,000
Note payable – bank P400, 000
 Aug 1 Cash P330, 000
Account receivable P330, 000

Interest expense P 4, 000

Note payable – bank P326, 000
Cash P330, 000

Sept 1 Cash P170, 000

Account receivable – assigned P170, 000

Interest expense P 740

Note payable – bank P74, 000
Cash P 74,740