Question

On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $690,000. On...

On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $690,000. On July 1, 2021, the company borrowed $540,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 11% is payable monthly. The company assigned specific receivables totaling $690,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.7% of the accounts receivable assigned. Required: Prepare the journal entry to record the borrowing on the books of High Five Surfboard

2.

The petty cash fund of Ricco's Automotive contained the following items at the end of September 2021:

Currency and coins $ 82
Receipts for the following expenditures:
Delivery charges $ 28
Printer paper 23
Paper clips and rubber bands 16 67
Lent money to an employee 37
Postage 44
Total $ 230


The petty cash fund was established at the beginning of September with a transfer of $230 from cash to the petty cash account.

Required:
Prepare the journal entry to replenish the fund at the end of September

Homework Answers

Answer #1

1

Journal Entry to record the BOrrowing:
Date Account Title and Explanation Debit($) Credit($)
Cash $     528,270
Finance Charge Expense(690000*1.7%) $       11,730
          Financing Arrangment $ 540,000
To record the Borrowing

2

Answer
General Journal Debit Credit

Delivery expense

$       28
Office supplies Expense (23+16) $       39
Receivable from employee $       37
Postage expense $       44
Cash $     148
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