Starlight Ltd. assigned $600,000 of Accounts Receivable to Moonbeam Management as security for a loan of $580,000. Moonbeam charged a 3% commission on the amount of the loan; the interest rate on the loan was 10%. During the first month, Starlight collected $320,000 of the assigned accounts, after deducting $500 of discounts. As well, Starlight accepted returns worth $2,600 and wrote off assigned accounts totalling $4,500. Entries made by Starlight during the first month would include a O debit to Accounts Receivable of $324,500. O debit to Cash of $322,600. O debit to Bad Debts Expense of $4,500. debit to Allowance for Doubtful Accounts of $4,500.

Starlight Ltd. assigned $600,000 of Accounts Receivable to Moonbeam Management as security for a loan of $580,000. Moonbeam charged a 3% commission on the amount of the loan; the interest rate on the loan was 10%. During the first month, Starlight collected $320,000 of the assigned accounts, after deducting $500 of discounts. As well, Starlight accepted returns worth $2,600 and wrote off assigned accounts totalling $4,500. Entries made by Starlight during the first month would include a O debit to Accounts Receivable of $324,500. O debit to Cash of $322,600. O debit to Bad Debts Expense of $4,500. debit to Allowance for Doubtful Accounts of $4,500.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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