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3. On May 1, Kristopher Evan, Inc. factored $400,000 of accounts receivable with Rapid Finance on a without recourse basis. Rapid Finance assessed a finance
3. On May 1, Kristopher Evan, Inc. factored $400,000 of accounts receivable with Rapid Finance on a without recourse basis. Rapid Finance assessed a finance charge of 3% of the total accounts receivable factored and retained an amount equal to 6% of the total receivables to cover sales discounts and returns. Required: a. Prepare the journal entry required on Kristophers books on May 1. b. Assume the receivables were factored on a with recourse basis instead. The recourse provision has a fair value of $10,000. Prepare the journal entry required on Kristophers books on May 1. c. Assume, instead, that on May 1 Kristopher assigned the accounts receivable to First State Bank as security for a loan in the amount of 300,000. First State charged a 2.5% finance fee on the receivables and the interest rate is 5%. Prepare the journal entry required on Kristophers books on May 1. d. Related to d., assume that Kristopher collected $125,000 on the receivables. Prepare the journal entry required by Kristopher. e. Kristopher remitted to First State Bank the collections from e. plus one months interest on the note payable. Prepare the journal entry required by Kristopher
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