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The following information is related to ABC Co.:
1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company.
2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections.
Required:
Problem 1: Prepare all necessary entries in general journal form for ABC Co.
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