Question
E7.17B (LO 5)(Transfer of Receivables with Recourse) Leon Quartet Inc. factors receivables with a carrying amount of $220,000 to Joffrey Company for $170,000 on a
E7.17B (LO 5)(Transfer of Receivables with Recourse) Leon Quartet Inc. factors receivables with a carrying amount of $220,000 to Joffrey Company for $170,000 on a with recourse basis.
Instructions
The recourse provision has a fair value of $1,000. This transaction should be recorded as a sale.
a) Prepare the appropriate journal entry to record this transaction on the books of Leon Quartet Inc.
b) Record the necessary journal entries, assuming that the sale was without recourse, i.e. the fair value of
the recourse obligation was zero.
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Financial And Managerial Accounting For Decision Makers
Authors: Michelle Hanlon, Robert Magee, Glenn Pfeiffer, Thomas Dyckman
4th Edition
1618533614, 9781618533616
