Beyonc Corporation factors $175,000 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2014. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.

(b)

Assume that the conditions are met for the transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2014, for Beyonc to record the sale of receivables, assuming the recourse liability has a fair value of $2,000.

date accounts and titles debits credits

august 15, 2014 1. ______________________ ________________ _______________

2. ______________________ ________________ _______________

3. ______________________ ________________ _______________

4. ______________________ ________________ _______________

5. ______________________ ________________ _______________