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AEB is considering transferring their $10M accounts receivable to a financial company on a non-notification basis where the receivables were transferred with recourse. The financing
AEB is considering transferring their $10M accounts receivable to a financial company on a non-notification basis where the receivables were transferred with recourse. The financing company is charging 10% of the total receivables. How should this transaction be accounted?
Multiple Choice
Debit finance expense $1M
Credit finance expense $1M
Debit discount on note payable $1M
Credit Note payable $10M
Debit receivable $10M
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