Question
a) Boston Computers factors $850,000 of receivables to Safety Factors, Inc. Safety Factors assesses a 3.5% service charge on the amount of receivables sold. b)
a) Boston Computers factors $850,000 of receivables to Safety Factors, Inc. Safety Factors assesses a 3.5% service charge on the amount of receivables sold.
b) Limeade Boutique accepted a Visa card for a $750 purchase. Visa charges a 2% service fee.
Requirement.
a) Prepare the journal entry Boston Computers would make for the factoring of the receivables.
b) Prepare the journal entry that Limeade Boutique would make to record the transaction.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the service charge on the factored receivables we can use ...
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Step: 2
Step: 3
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Financial Accounting: A Business Process Approach
Authors: Jane L. Reimers
3rd edition
978-013611539, 136115276, 013611539X, 978-0136115274
