Question

On April 1, 2020, Coronado Company assigns $550,000 of its accounts receivable to the Third National Bank as collateral for a $324,000 loan due July 1, 2020. The assignment agreement calls for Coronado to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type).

Prepare the April 1, 2020, journal entry for Coronado Company. (If no entry is required, select "No Entry" for the account titles and enter 0 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
Apr. 1, 2020

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/2.45

Prepare the journal entry for Coronado’s collection of $353,800 of the accounts receivable during the period from April 1, 2020, through June 30, 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

eTextbook and Media

List of Accounts

  

  

Question Part Score

--/0.5

On July 1, 2020, Coronado paid Third National all that was due from the loan it secured on April 1, 2020. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter 0 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, 2020

Answer 1

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
April 1, 2020	Cash   -Bal. Fig.	$ 302,000
	Interest expense ( $ 550,000 x 4% )	$ 22,000
	Notes payable		$ 324,000
	(To record the issue of Note)
-	Cash	$ 353,800
	Accounts receivable		$ 353,800
	(To record the amount collected from Accounts )
july 1, 2020	Notes payable	$ 324,000
	Interest expense ( $ 324,000 x 10% x 3 /12)	$ 8,100
	Cash - Bal. Figure		$ 332,100
	(To record the Payment of Note )