Cullumber Company sells $606,000 of receivables with a fair value of $617,600 to Cullumber Trust in a securitization transaction that meets the criteria for a sale. Cullumber Company receives full fair value for the receivables and agrees to continue to service them, estimating that the fair value of this service liability component is $28,670. Prepare the journal entry for Cullumber Company to record the sale.

Question 1

In October 1, 2017, Metlock, Inc. assigns $2.0 million of its accounts receivable to Alberta Provincial Bank as collateral for a $1.6-million loan evidenced by a note. The bank's charges are as follows: a finance charge of 4% of the assigned receivables and an interest charge of 12% on the loan. Prepare the October 1 journal entries for both Metlock and Alberta Provincial Bank. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Bramble Corp. sold $756,300 of accounts receivable to Marin Inc. on a with recourse basis under ASPE, as the risks and rewards have been transferred to Marin. The transaction meets the criteria for a sale, and no asset or liability components of the receivables are retained by Bramble. Marin assesses a finance charge of 4% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable. Prepare the journal entry for Bramble to record the sale, assuming the recourse obligation has a fair value of $9,470.