On October 1, 2020, Sandhill, Inc. assigns $1,122,400 of its accounts receivable to Teal National Bank as

On October 1, 2020, Sandhill, Inc. assigns $1,122,400 of its accounts receivable to Teal National Bank as collateral for a $719,700 note. The bank assesses a finance charge of 3% of the receivables assigned and interest on the note of 10%. Prepare the October 1 journal entries for both Sandhill and Teal

Expert Solution

In the books of Sandhil

Date	Accounts title and explanation	Debit	Credit
1-Oct	Cash	$ 686,028
	Finance charges or (Interest expense) (1,122,400*3%)	$ 33,672
	Notes payable		$ 719,700
	[ To record loan ]

In the books of Teal; national bank

1-Oct	Notes receivable	$ 719,700
	cash		$ 686,028
	Interest revenue		$ 33,672
	[ To record loan ]

Date	Accounts title and explanation	Debit	Credit
1-Oct	Cash	$ 686,028
	Finance charges or (Interest expense) (1,122,400*3%)	$ 33,672
	Notes payable		$ 719,700

Ramesh R answered 3 years ago

Teal Mountain Corporation leases a building to Sandhill, Inc. on January 1, 2020. The following facts...

Teal Mountain Corporation leases a building to Sandhill, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $3,824 at the end of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $34,900, a book value...

(TCO B) Adjusting entries: On April 1, 201X, Jokers Company assigns $600,000 of its accounts receivable...

(TCO B) Adjusting entries: On April 1, 201X, Jokers Company assigns $600,000 of its accounts receivable to the First National Bank as collateral for a $300,000 loan due July 1, 201X. The assignment agreement calls for Jokers Company to continue to collect the receivables. First National Bank assesses a finance charge of 2% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the journal entry for...

Artis, Inc. uses the aging of accounts receivable method for estimating uncollectible accounts. As of October...

Artis, Inc. uses the aging of accounts receivable method for estimating uncollectible accounts. As of October 31, total Accounts Receivable was $17,800 of which $8,400 was 0 - 30 days old; $5,900 was 31 - 60 days old; and the remainder was over 60 days old. Artis estimates 1% of accounts 0 - 30 days old will be uncollectible; 5% of accounts 31 - 60 days old will be uncollectible; and 15% of accounts over 60 days old will be...

1. On October 1, the accounts receivable account balance was $208,400. During October, $298,500 was collected...

1. On October 1, the accounts receivable account balance was $208,400. During October, $298,500 was collected from customers on account. Assuming the October 31 balance was $125,300, determine the fees billed to customers on account during October. 2. On November 30, the company accountant discovers that $550 of a transaction recording the purchase of office supplies was really office equipment. Prepare the journal entry to correct this situation. 3. State for each account whether it is likely to have (a)...

Solstice Company determines on October 1 that it cannot collect $63,000 of its accounts receivable from...

Solstice Company determines on October 1 that it cannot collect $63,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1. Record the write off an account. Record the write off an account. Date General Journal Debit Credit Oct 01 Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system). Sold $32,000 of merchandise, which cost $24,600, on Mastercard credit cards....

Name __ 1. The balance in accounts receivable is $687,000. At the end of October, Ace...

Name __ 1. The balance in accounts receivable is $687,000. At the end of October, Ace Company management estimates the uncollectible accounts expense to be 1 percent of net sales of $2,770,000. 1a. Give the entry to record the uncollectible accounts expense, assuming that the Allowance for Uncollectible Accounts has a debit balance of $14,000. DR ACCOUNT _____uncollectible accounts expense____ AMOUNT $___ CR ACCOUNT _To record estimated uncollectible accounts___________ AMOUNT $_ 1b. What is the balance in the Allowance for...

At December 31, 2021, Sandhill Imports reported this information on its balance sheet. Accounts receivable $518,000...

At December 31, 2021, Sandhill Imports reported this information on its balance sheet. Accounts receivable $518,000 Less: Allowance for doubtful accounts 38,500 During 2022, the company had the following transactions related to receivables. 1. Sales on account $2,350,000 2. Sales returns and allowances 55,000 3. Collections of accounts receivable 2,050,000 4. Write-offs of accounts receivable deemed uncollectible 45,000 5. Recovery of bad debts previously written off as uncollectible 14,000 1. Prepare the journal entries to record each of these five...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank financing for your small business DISCUSS THE ABOVE STATEMENT BY TAKING EXAMPLE OF BUSINESS ORGANIZATION OF YOUR CHOICE.

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank financing for your small business DISCUSS THE ABOVE STATEMENT BY TAKING EXAMPLE OF BUSINESS ORGANIZATION OF YOUR CHOICE. * reference only MC GRAW

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank financing for your small business DISCUSS THE ABOVE STATEMENT BY TAKING EXAMPLE OF BUSINESS ORGANIZATION OF YOUR CHOICE. answer in 2 pages

Question

On October 1, 2020, Sandhill, Inc. assigns $1,122,400 of its accounts receivable to Teal National Bank as

Solutions

Expert Solution

Related Solutions

Teal Mountain Corporation leases a building to Sandhill, Inc. on January 1, 2020. The following facts...

(TCO B) Adjusting entries: On April 1, 201X, Jokers Company assigns $600,000 of its accounts receivable...

Artis, Inc. uses the aging of accounts receivable method for estimating uncollectible accounts. As of October...

1. On October 1, the accounts receivable account balance was $208,400. During October, $298,500 was collected...

Solstice Company determines on October 1 that it cannot collect $63,000 of its accounts receivable from...

Name __ 1. The balance in accounts receivable is $687,000. At the end of October, Ace...

At December 31, 2021, Sandhill Imports reported this information on its balance sheet. Accounts receivable $518,000...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...

What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing : An alternative to bank...