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Hollins Incorporated sold $300,000 of accounts receivables to Goodman factors Incorporated in a with recourse basis. Goodman assesses a 4% finance charge of the balance
Hollins Incorporated sold $300,000 of accounts receivables to Goodman factors Incorporated in a with recourse basis. Goodman assesses a 4% finance charge of the balance of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments.
Instructions: Prepare the journal entry for Hollins Incorporated to record the sale of the accounts receivable to Goodman, assuming that the recourse liability has a fair value of $10,000.
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