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I keep geting partially correct. Please explain. Thank you. Account Name Entries: Cash Accounts Receivable Allowance for Doubtful Accounts Interest Receivable Receivable from Factor Note
I keep geting partially correct. Please explain. Thank you.
Account Name Entries:
Cash Accounts Receivable Allowance for Doubtful Accounts Interest Receivable Receivable from Factor Note Receivable Discount on Note Receivable Payable to Seller of Receivables Refund Liability Recourse Liability Note Payable Sales Revenue Sales Returns Sales Discount Sales Discount Forfeited Financing Revenue Interest Revenue Cost of Goods Sold Bad Debt Expense Finance Expense Interest Expense Loss on Sale of Note Loss on Sale of Receivables N/A |
Recording the sale of Accounts Receivable Without Recourse Apparel Inc. manufactures sportswear for retailers and frequently sells its receivables to factors as a means of accelerating cash collections. On December 1, 2020, Apparel Inc. sold $40,000 of its receivables to Factor Bank. The receivables were sold without recourse. The factor charged 8% and held back 5% for sales adjustments. Bad debts estimated on the receivables is $200. Required Record all journal entries related to the sale of accounts receivable for (a) Apparel Inc., and (b) Factor Bank. a. Apparel Inc. Note: Record debits in alphabetical order based on the first letter of the account name. Account Name Dr. Cr. Cash 34800 0 Receivable from Factor . 0 Loss on Sale of Receivables Accounts Receivable 0 40000 IN 3200 2000 0 Cr. 40000 0 > b. Factor Note: Record credits in alphabetical order based on the first letter of the account name. Account Name Dr. Accounts Receivable Cash 0 34800 Financing Revenue 3200 Payable to Seller of Receivables 0 2000 To record purchase of receivables Payable to Seller of Receivables 200 0 Allowance for Doubtful Accounts 200 To record estimate of uncollectible accounts 0 0 Check
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