Mountain High Ice Cream Company transferred $$66,000$ of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits $90\%$ of the factored amount to Mountain High and retains $10\%$ to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount $($which Mountain estimates has a fair value of $$5,600).$ Mountain High anticipates a $$3,600$ recourse obligation. The bank charges a $2\%$ fee of $$66,000),$ and requires that amount to be paid at the start of the factoring arrangement.

Required:

Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

$1$

Record the transfer of accounts receivable.

Note: Enter debits before credits.

$\backslash$table$[[$Event$,$General Journal,Debit,Credit$],[1,$Cash,,$],[,$Loss on sale of receivables,,$],[,$Receivable from factor,,$],[,$Accounts receivable,,$],[,,,],[,,,]]$