Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Flounder Corp. factors $695,000 of accounts receivable with Shamrock, Inc., Inc. on a with recourse basis. Shamrock, Inc. will collect the receivables. The receivable records

image text in transcribed

Flounder Corp. factors $695,000 of accounts receivable with Shamrock, Inc., Inc. on a with recourse basis. Shamrock, Inc. will collect the receivables. The receivable records are transferred to Shamrock, Inc. on August 15, 2020. Shamrock, Inc. assesses a finance charge of 2.0% of the amount of accounts receivable and also reserves an amount equal to 5.40% of accounts receivable to cover probable adjustments. Flounder prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Flounder to record the sale of receivables, assuming the recourse obligation has a fair value of $6,000. (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 o for the amounts.) Account Titles and Explanation Debit Credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Employee Relations Audits

Authors: C. Jennings, W. E. J. McCarthy, R. Undy

1st Edition

0415786614, 978-0415786614

More Books

Students also viewed these Accounting questions