Assignment

Question 1

What is the Formula in determining Cash Received in AR’s assignment?

Answer 1

Face amount of Loan

Less Finance Fee

Question 2

Journal Entry for AR’s Assignment?

Answer 2

Debit to CASH
Credit to FINANCE CHARGE & NOTES PAYABLE

Dr AR assigned
Cr AR

Question 3

Amount of gain/loss on the transfer of AR?

Answer 3

NO GAIN OR LOSS is recognized because assignment of AR is secured borrowing and NOT a SALE