Problem:
Accounts Receivable in the amount of $640,000 were assigned to the Fast Finance Company by Meyers, Inc., as security for a loan of $500,000. The finance company charged a 4% commission on the face amount of the loan, and the note bears interest at 6% per year.
During the first month, Meyers collected $330,000 on assigned accounts. This amount was remitted to the finance company along with one months interest on the note.
Instructions: Make all the entries for Meyers, Inc. associated with the loan, the collection of the receivable and the remittance to the finance company.