Please explain how do i calculate this problem.

Question by Janelle101 Reward: 25 Pond Points + 10 Knowledge Tokens Status: Pending a resolution
On September 1, Riva Co. assigns specific receivables totaling $750,000 to Pacific Bank as collateral on a $625,000, 12 percent note. Riva Co. will continue to collect the assigned accounts receivable. Pacific also assesses a 2 percent service charge on the total accounts receivable assigned. Riva Co. is to make monthly payments to Pacific with cash collected on assigned accounts receivable. Collections of assigned accounts during September totaled $260,000 less cash discounts of $3,500. What amount is owed to Pacific by Riva Co. for September collections plus accrued interest on the note to September 30?

September 1........................................September 30
Debit Bank (98%)....................$---Debit Cash..........................$
Debit Finance charges (2%)..........$---Debit Discount allowed..............$
Credit Pacific Bank (100%)..........$---Credit accounts receivable assigned.$
To record funds provided by bank....$---Debit Interest expense (1%).........$
Debit Accounts receivable assigned..$---Debit Pacific Bank (99%.............$
Credit accounts receivable..........$---Credit Cash.........................$

Clarification by Janelle101
What tutor are you speaking about, i bought this book to try and understand accounting i haven't decided what course i will be taking in high school. I think you should of asked if this is homework or self thought.

Clarification by Janelle101
Ok. Leakywelly this is what i came up with; but as you can see i am having problem with September 30.
September 1.................................................September 30
Debit Bank (98%) 625,00015,000 = $610,000.........Debit Cash 260,000 3,500 = $256,500
Debit Finance charges (2%) 750,000*.02 = $15,000...Debit Discount allowed = $3,500
Credit Pacific Bank (100%) = $625,000..............Credit accounts receivable assigned= $260,000
To record funds provided by bank...................Debit Interest expense (1%) =

Debit Accounts receivable assigned = $750,000......Debit Pacific Bank (99%) =
Credit accounts receivable = $750,000..............Credit Cash =



Reply from leakywelly User Rating:  2550 Knowledge Tokens
had you of listened to your tutor you wouldnt have to ask.i suggest you listen in the future.you will not pass your exams by asking others.
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Reply from leakywelly User Rating:  2550 Knowledge Tokens
appologies for assuming.
do you understand algebra.if so break down the problem into basic units of amounts there are amounts plus interest per month and find out what interest ther is on each transaction.would be easiest to do some form of bar chart or graph.
or you could always use microsoft exel and fill in the cells and do a formula.
good luck number crunching.it is a bit daunting at first but once you get the basics its mainly repatition and double checking
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