Answered step by step
Verified Expert Solution
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
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
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 Started