Domain Company assigned certain accounts receivable to a bank for a loan on the following...
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Domain Company assigned certain accounts receivable to a bank for a loan on the following basis: 75% cash advcance, 4% service charge on gross accounts assigned, 2% interest per month is to be charged, and the bank makes the collections. The entity signed a promissory note for the loan.
July 1 Received remittance upon the specific assignment of 1,500,000 in accounts to the bank.
Aug 1 Received notice from the bank that 800,000 of the assigned accounts were collected. A check was sent to the bank for one month interest charge.
Sept 1 Received notice from the bank that the assigned accounts of 500,000 were collected in full and the remaining accounts of 200,000 were being returned. Accordingly, a check was received from the bank in settlement of the assignment contract. In making the settlement, the bank deducted the interest charge for the corresponding period.
Required:
Prepare the journal entries on the books of the assignor.
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