Mountain High Ice Cream Company transferred $$75,000$ 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 $$6,500).$ Mountain High anticipates a $$4,500$ recourse obligation. The bank charges a $3\%$ fee of $$75,000,$

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.