The Fullbright Book Company transferred $200,000 of accounts receivable to the American Trust Bank. The transfer was made without recourse. American Trust remits 90% of the factored amount and retains 10% (Fullbright estimates the fair value of that 10% to be $15,000). When the bank collects the receivables, it will remit to Fullbright the retained amount less a 1% fee (1% of the total factored amount).

Prepare the journal entry to record the transfer on the books of Fullbright assuming that the sale criteria are met.

The Fullbright Book Company transferred $200,000 of accounts receivable to the American Trust Bank. The transfer was made with recourse. American Trust remits 90% of the factored amount and retains 10% (Fullbright estimates the fair value of that 10% to be $12,000). When the bank collects the receivables, it will remit to Fullbright the retained amount less a 1% fee (1% of the total factored amount). Fullbright anticipates a $4,000 recourse obligation.

Prepare the journal entry to record the transfer on the books of Fullbright assuming that the "sale" criteria are met.

On March 1, 2016, the Fullbright Book Company assigns $200,000 of accounts receivable to the American Trust Bank as collateral for an $160,000 loan due in six months. Fullbright will continue to collect the receivables. American Trust assesses a finance charge of 2% of the accounts receivable at the initiation of the loan; interest on the loan is 8%, payable six months later.

Prepare the March 1, 2016 journal entry for Fullbright.

Prepare the journal entry for Fullbright when it pays back the loan with interest on Aug 31, 2016.