CALCULATOR FULL SCREEN PRINTER VERSION 4 BACK NEXT Problem 7

CALCULATOR FULL SCREEN PRINTER VERSION 4 BACK NEXT Problem 7-10 Cheyenne Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2017, it assigned, under guarantee, specific accounts amounting to $255,000. The finance company advanced to Cheyenne 80 % o the accounts as a ed % of th to a to be withhel, unti: the finance compa y as made ts L recovery), less a finance charge of 0.50% of the total accounts assigned. On July 31, Cheyenne Company received a statement that the finance company had collected s13 00 of these ac urts and ha made an additional charge f.s%?te?I accounts outstanding as of July 31. This charge is to be deducted at the time of the first remittance due Cheyenne Company from the finance company. (Hint: Make entries at this time.) On August 31, 2017, Cheyenne Company received a second statement from the finance company, together with a check for the amount due. The statement indicated that the I finance company had collected an additional $85,000 and had made a further charge of 0.50% of the balance outstanding as of August 31 Make all entries on the books of Cheyenne Company that are involved in the transactions above. (If no entry is required, select \"No Entry\" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 (To record the collection of accounts) (To record the interest) Version 4,24.7.7 All Rights Reserved. A Division of 3ghn Wiley &so; 32 PM e to search

Solution

Date Particulars Debit   Credit 1.7.14 Cash $ 178,875.00 Finances Charges $      1,125.00 Notes Payable $ 180,000.00 31.7.2014 Notes Payable $ 136,000.00 Accounts Receivable $ 136,000.00 (To record collection of accounts) 31.7.2014 Finance Charges $          445.00 Finances Charges Payable $          445.00 (To record interest) 31.8.2014 Cash $    40,535.00 Finance Charges $            20.00 Finances Charges Payable $          445.00 Notes Payable $    44,000.00 Accounts Receivab;e $    85,000.00 (To record collection of cheque)