Assignment of Accounts Receivable Journal Entries

The assignment of accounts receivable journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of accounts receivable assignment.

In each case the assignment of accounts receivable journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section, and our tutorial on receivables financing.

Assignment of Accounts Receivable Journal Entries

The assignment of accounts receivable journal entries are based on the following information:

  1. Accounts receivable 50,000 on 45 days terms
  2. Assignment fee of 1% (500)
  3. Initial advance of 80% (40,000)
  4. Cash received from customers 6,000
  5. Interest on advances at 9%, outstanding on average for 40 days (40,000 x 9% x 40 / 365 = 395)

Journals

Customer invoice creation journal
Account Debit Credit
Accounts receivable 50,000
Revenue 50,000

To transfer accounts receivable to assigned accounts receivable
Account Debit Credit
Assigned accounts receivable 50,000
Accounts receivable 50,000

Cash advance less fee received from financing company
Account Debit Credit
Cash (advance) 39,500
Assignment fees 500
Loan or Note Payable 40,000

Cash received from customers journal
Account Debit Credit
Cash 6,000
Assigned accounts receivable 6,000

Monthly interest on the cash advance balance
Account Debit Credit
Interest expense 395
Loan or Note payable 395

Cash from customers and interest both paid to financing company
Account Debit Credit
Cash 6,395
Loan or Note payable 6,395

Assignment of Accounts Receivable Journal Entries November 6th, 2016Team

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