Answered step by step
Verified Expert Solution
Question
1 Approved Answer
how to complete this E6.19 (LO 5) (Transfer of Receivables without Recourse) JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a
how to complete this
E6.19 (LO 5) (Transfer of Receivables without Recourse) JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a without recourse basis on July 1, 2025. The receivables records are transferred to LBJ Finance, which will receive the collections. LBJ Finance assesses a finance charge of 11/2% of the amount of accounts receivable and retains an amount equal to 4% of account receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. Instructions a. Prepare the journal entry on July 1, 2025, for JFK Corp. to record the sale of receivables without recourse. b. Prepare the journal entry on July 1, 2025, for LBJ Finance Corporation to record the purchase of receivables without recourseStep 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