Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000) less a 2% fee (2% of the total factored amount).

Cash 52,800

Loss on sale of rceivable 5,200

Receivable from factor 5,000

accounts receivable 60,000 (credit)

Recourse Liability ???

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