On June 30, 2024, the High Five Surfboard Company had outstanding accounts receivable of $780,000. On July 1, 2024, the company borrowed $630,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $780,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.5% of the accounts receivable assigned. Required: Prepare the journal entry to record the borrowing on the books of High Five Surfboard. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On June 30, 2024, the High Five Surfboard Company had outstanding accounts receivable of $780,000. On July 1, 2024, the company
borrowed $630,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The
company assigned specific receivables totaling $780,000 as collateral for the loan. Equitable Finance charges a finance fee equal to
1.5% of the accounts receivable assigned.
Required:
Prepare the journal entry to record the borrowing on the books of High Five Surfboard.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Transcribed Image Text:On June 30, 2024, the High Five Surfboard Company had outstanding accounts receivable of $780,000. On July 1, 2024, the company borrowed $630,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $780,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.5% of the accounts receivable assigned. Required: Prepare the journal entry to record the borrowing on the books of High Five Surfboard. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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