Recording the Sale of Accounts Receivable With Recourse

Cappa Apparel manufactures sportswear for retailers and frequently sells its receivables to factors as a means of accelerating cash collections. On December 1, 2020, Cappa sold $100,000 of its receivables to Factor Bank. The receivables were the sale with recourse. The factor charged 6% and held back 10% for sales adjustments. Cappa records a $4,000 recourse obligation.

Required

Record all journal entries related to the sale of accounts receivable for (a) Cappa Apparel, and (b) Factor Bank.

Note: If a line in the journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).

a. Cappa Apparel.

Note: Record debits in alphabetical order based on the first letter of the account name.

Cash Accounts Receivable Allowance for Doubtful Accounts Interest Receivable Receivable from Factor Note Receivable Discount on Note Receivable Payable to Seller of Receivables Refund Liability Recourse Liability Note Payable Sales Revenue Sales Returns Sales Discount Sales Discount Forfeited Financing Revenue Interest Revenue Cost of Goods Sold Bad Debt Expense Finance Expense Interest Expense Loss on Sale of Note Loss on Sale of Receivables N/A

Account Name	Dr.	Cr.
?	?	?
?	?	?
?	?	?
Accounts Receivable	?	?
?	?	?

b. Factor

Note: Record credits in alphabetical order based on the first letter of the account name.

Account Name	Dr.	Cr.
?	?	?
?	?	?
?	?	?
?	?	?

Recording the Sale of Accounts Receivable With Recourse Cappa Apparel manufactures sportswear for retailers and frequently sells its receivables to factors as a means of accelerating cash collections. On December 1, 2020, Cappa sold $100,000 of its receivables to Factor Bank. The receivables were the sale with recourse. The factor charged 6% and held back 10%% for sales adjustments. Cappa records a $4,000 recourse obligation. Required Record all journal entries related to the sale of accounts receivable for (a) Cappa Apparel, and (b) Factor Bank. Note: If a line in the journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). a. Cappa Apparel. Note: Record debits in alphabetical order based on the first letter of the account name. Account Name Dr. Cr. 0 0 0 Accounts Receivable 0 b. Factor Note: Record credits in alphabetical order based on the first letter of the account name. Account Name Dr. Cr. 0 0