Geary Co. assigned $800,000 of accounts receivable to Kwik Finance Co. as security for a loan of $670,000. Kwik charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During the first month, Geary collected $220,000 on assigned accounts after deducting $760 of discounts. Geary accepted returns worth $2,700 and wrote off assigned accounts totaling $5,960.Entries during the first month would include a

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The write-off of assigned accounts would require a debit to Allowance for Doubtful Accounts, not Bad Debt Expense, as the accounts were previously estimated to be uncollectible.

Geary Co Assigned $800,000 of Accounts Receivable to Kwik Finance Co