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Assume on 1/1 Justin Inc. wants to factor $100,000 of accounts receivable to Landgraf Financing Company. Landgraf charges 3% finance charge of the accounts receivable
Assume on 1/1 Justin Inc. wants to factor $100,000 of accounts receivable to Landgraf Financing Company. Landgraf charges 3% finance charge of the accounts receivable factored. 5% reserve is created for sales discounts on the amount factored. In addition, Justin Inc. expects that 1% of A/R Trade should be reserved for uncollectible accounts. Sales Discounts to Customers Sales Returns Accounts Deemed Uncollectible Cash Collected from Customer 750 60,000 Without Recourse With Recourse Justin Inc Landgraf Finance Justin Inc Landgraf Finance Credit Debit Credit Credit Credit Cash Due from Factoring Loss on Factoring Accounts Receivable Cash Due from Factoring Loss on Factoring Accounts Receivable Due from Customer Interest Revenue Due from Customer Interest Revenue Cash Accounts Receivable Accounts Receivable Bad Debt Expense Loss on Factoring Allowance for Doubtful Accounts Recourse Liability Cash Accounts Receivable Accounts Receivable Sales Discount Due from Customer Sales Discount Sales Returns Due from Customer Accounts Receivable Accounts Receivable Due from Factoring Due from Factoring Allowance for A/R Accounts Receivable Recourse Liability Due from Factoring Assume on 1/1 Justin Inc. wants to factor $100,000 of accounts receivable to Landgraf Financing Company. Landgraf charges 3% finance charge of the accounts receivable factored. 5% reserve is created for sales discounts on the amount factored. In addition, Justin Inc. expects that 1% of A/R Trade should be reserved for uncollectible accounts. Sales Discounts to Customers Sales Returns Accounts Deemed Uncollectible Cash Collected from Customer 750 60,000 Without Recourse With Recourse Justin Inc Landgraf Finance Justin Inc Landgraf Finance Credit Debit Credit Credit Credit Cash Due from Factoring Loss on Factoring Accounts Receivable Cash Due from Factoring Loss on Factoring Accounts Receivable Due from Customer Interest Revenue Due from Customer Interest Revenue Cash Accounts Receivable Accounts Receivable Bad Debt Expense Loss on Factoring Allowance for Doubtful Accounts Recourse Liability Cash Accounts Receivable Accounts Receivable Sales Discount Due from Customer Sales Discount Sales Returns Due from Customer Accounts Receivable Accounts Receivable Due from Factoring Due from Factoring Allowance for A/R Accounts Receivable Recourse Liability Due from Factoring
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