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Presented below is information for Jones Company. 1. Beginning-of-the-year Accounts Receivable balance was $20,800. 2. Net sales (all on account) for the year were $105,400.
Presented below is information for Jones Company.
1. | Beginning-of-the-year Accounts Receivable balance was $20,800. | |
2. | Net sales (all on account) for the year were $105,400. Jones does not offer cash discounts. | |
3. | Collections on accounts receivable during the year were $88,700. |
Jones is planning to factor some accounts receivable at the end of the year. Accounts totaling $10,200 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 7% of the balances for probable adjustments and assesses a finance charge of 6%. The fair value of the recourse obligation is $1,030.
Prepare the journal entry to record the sale of the receivables
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