Prepare the journal entry to record the sale of the receivables. Presented below

Question

Prepare the journal entry to record the sale of the receivables.

Presented below is information for Blossom Company.
1. Beginning-of-the-year Accounts Receivable balance was $16,200. 2. Net sales (all on account) for the year were $103,200. Blossom does not offer cash discounts. 3. Collections on accounts receivable during the year were $85,100.
Blossom is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,300 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,108.

Explanation / Answer

Cash 11837 =13300-798-(13300*5%) Due from factor 798 =13300*6% Loss on sale of receivables 1773       Accounts receivable 13300       Recourse obligation 1108

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---