On 1st January 2030 Zivick Co. assigned K9,000,000 from their Accounts Receivable of K12,000,000 to BSP under a notification arrangement. BSP bank loans 85% less 1.2% service charge based from Zivick company’s Accounts Receivable. Zivick signed a promissory note that provides for 1.8% interest per month on the unpaid loan balance. At the end of January, Zivick Co. received a notice from BSP that K4,000,000 of the assigned Accounts Receivable were collected less 2.5% discount. At the end of February, Zivick Co. received notice from BSP that K2,700,000 of the assigned accounts were collected less 2.8%. By 31st of March BSP sent notice to Zivick Co. for their collection of K2,120,000 less 3%. Final settlement was made.
Prepare the ACCOUNTING ENTRIES and show the ledger account of your ACCOUNTS RECEIVABLE – ASSIGNED ONLY.
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