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Monty Corp. sold $725,000 of accounts receivable to Teal Mountain Inc. on a with recourse basis under ASPE, as the risks and rewards have been
Monty Corp. sold $725,000 of accounts receivable to Teal Mountain Inc. on a with recourse basis under ASPE, as the risks and rewards have been transferred to Teal Mountain. The transaction meets the criteria for a sale, and no asset or liability components of the receivables are retained by Monty. Teal Mountain assesses a finance charge of 5% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable. Prepare the journal entry for Monty to record the sale, assuming the recourse obligation has a fair value of $9,000. (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
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