Homework SourseOn October 1 2017 Chung Inc assigns 1000000 of its accounts
On October 1, 2017, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9%.
Prepare the October 1 journal entries for both Chung and Seneca. (If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. C
Solution
Chung, Inc.
Seneca National Bank
| General Journal | Debit | Credit |
| Cash | $730,000 | |
| Interest Expense ($1,000,000 * 2%) | $20,000 | |
| Notes Payable | $750,000 |
