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Tammy Company has accounts receivable of $100,000. The company transfers these accounts receivable to a financial institution. There are $6,300 of bad debts associated with
Tammy Company has accounts receivable of $100,000. The company transfers these accounts receivable to a financial institution. There are $6,300 of bad debts associated with these accounts receivable, and amount that is already in the allowance for doubtful accounts. Proceeds of $88,000 are received from the transfer. The transfer is on a non- notification basis, which means that the customers pay Tammy Company, and Tammy Company emits the cash to the financial institution. The customers pay $93,700 to Tammy on schedule, and the cash remittance is forwarded to the financial institution. 1. If the transfer is recorded as a sale, please record all necessary journal entries. 2. If the transfer is recorded as a borrowing, please record all necessary journal entries
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