Question
On November 15, 2021, Regina Corporation factored receivables with a carrying amount of $426,100 with Moose Jaw Inc. Moose Jaw Inc. assessed a finance charge
On November 15, 2021, Regina Corporation factored receivables with a carrying amount of $426,100 with Moose Jaw Inc.
Moose Jaw Inc. assessed a finance charge of 4% of the receivables and retained 5% of the receivables.
Regina Corporation follows ASPE, and has a year end of December 31.
Required:
- Prepare the journal entry required on the books of Regina Corporation on November 15, 2021 for the disposal of the receivables. Assume that the receivables are factored on a without recourse basis. (2 marks)
- Prepare the journal entry required on the books of Regina Corporation on November 15, 2021 for the disposal of the receivables. Assume that the receivables are factored on a with recourse basis, and that the recourse obligation has a fair value of $8,520. (3 marks)
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Practicing Financial Planning
Authors: Sid Mittra, Anandi P Sahu, Brian Fischer
12th Edition
9386042851, 9789386042859
