On Nov 24, 20X1, ABC Company borrowed P750,000, 45-day loan from a bank and pledged its receivables as collateral security. ABC received the loan proceeds after deduction of P27,000 advance interest. The entry to record the transaction on Nov 24 is: Dr Cash 750,000 Cr Loans Payable 750,000 Dr Cash 723,000, Dr Discount on notes 27,000 Cr Loans Payable Dr Cash 723,000, Dr Accounts Receivable 27,000 , Cr Loans Payable 750,000 No entry required

On Nov 24, 20X1, ABC Company borrowed P750,000, 45-day loan from a bank and pledged its receivables as collateral security. ABC received the loan proceeds after deduction of P27,000 advance interest. The entry to record the transaction on Nov 24 is: Dr Cash 750,000 Cr Loans Payable 750,000 Dr Cash 723,000, Dr Discount on notes 27,000 Cr Loans Payable Dr Cash 723,000, Dr Accounts Receivable 27,000 , Cr Loans Payable 750,000 No entry required

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
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