Prepare journal entries for Chapman Co. for:
(a) Accounts receivable in the amount of $600,000 were assigned to Varano Finance Co. by Chapman as security for a loan of $575,000. Varano charged a 4% commission on the accounts; the interest rate on the note is 8%.
(b) During the first month, Chapman collected $350,000 on assigned accounts after deducting $575 of discounts. Chapman wrote off a $1,500 assigned account.
(c) The amount Chapman paid to Varano (including one month’s interest on the note) at the end of the first month.
Prepare journal entries for Chapman Co. for:Chapman Co.Account Titles and Explanation Debit (a) CashFinance Charge / Interest ExpenseNotes Payable 551,00024,000 (b CashSales Discounts…