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:
Accounts receivable 50,000 on 45 days terms
Assignment fee of 1% (500)
Initial advance of 80% (40,000)
Cash received from customers 6,000
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
Last modified November 26th, 2019 by Michael Brown
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.
