Exercise $7-24($Algo$)$ Factoring of accounts receivable without recourse $[$L$07-8]$

Mountain High Ice Cream Company transferred $$79,000$ of accounts receivable to the Prudential Bank. The transfer was made without

recourse. Prudential remits $90\%$ of the factored amount to Mountain High and retains $10\%.$ When the bank collects the receivables, it

will remit to Mountain High the retained amount $($which Mountain estimates has a fair value of $$6,900)$ less a $3\%$ fee of the total

factored amount$).$

Required:

Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

$1$

Record the transfer of accounts receivable.

Note: Enter debits before credits.