Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

16. A company factors $2,000,000 of its accounts receivables with recourse for a finance charge of 4%. The finance company retains an amount equal to

16. A company factors $2,000,000 of its accounts receivables with recourse for a finance charge of 4%. The finance company retains an amount equal to 8% of the accounts receivable for possible adjustments. Management of the company estimates the fair value of the recourse liability at $200,000. Prepare the journal entry(ies) (in T-account format) to recognize this scenario.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Risk In The Operation Of EDF Financed Projects

Authors: Koffi Rufin Kouame

1st Edition

6205912651, 978-6205912652

More Books

Students also viewed these Accounting questions

Question

Discuss the various types of leasing.

Answered: 1 week ago

Question

Define the term "Leasing"

Answered: 1 week ago

Question

What do you mean by Dividend ?

Answered: 1 week ago

Question

What is database?

Answered: 1 week ago

Question

Describe the nature of negative messages.

Answered: 1 week ago