Question
Erindale Inc. is considering transferring $435,000 of their accounts receivable to a financial institution on June 30, 2018. The financial institution will charge a financing
Erindale Inc. is considering transferring $435,000 of their accounts receivable to a financial institution on June 30, 2018. The financial institution will charge a financing fee equal to 10% of the gross receivables. A total of $16,000 of bad debts, already included in the current allowance for doubtful accounts, is associated with these accounts receivable. The transfer is without recourse, on a notification basis, and the financing company will have the right to re-sell the accounts receivable without the permission of Erindale Inc.
The company has asked you to provide the journal entry(s) to record the transfer of the accounts receivable should they decide to move forward.
Step by Step Solution
3.51 Rating (158 Votes )
There are 3 Steps involved in it
Step: 1
Journal entries Date General Journal Debit Credit June ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App