Ask Question
BusinessBusiness
6 December, 01:31

Whispering Corporation factors $276,900 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments. (b) Assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Whispering to record the sale of receivables, assuming the recourse obligation has a fair value of $3,520.

+5
Answers (1)
  1. 6 December, 03:45
    0
    The journal entry is given below.

    Explanation:

    Journal entry.

    Aug. 15 2020 Cash A/c Dr $260,286

    Reserve amount A/c Dr $11,076

    Loss on sale A/c Dr $9,058

    To Recourse obligation A/c $3,520

    To Accounts receivable A/c $276,900

    Computation are as follows:

    Accounts Receivable = $276,900

    Finance charges = $276,900 * 2% = $5,538

    Reserve amount = $276,900 * 4% = $11,076

    Recourse obligation=$3,520

    Loss on sale = Finance charges + Recourse obligation = $9,058

    Cash proceeds = Accounts Receivable - Finance charges - Reserve amount = $260,286
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Whispering Corporation factors $276,900 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $4,000Salaries expense 1,500Accounts payable 2,000Retained earnings 4,400Utilities expense 1,000Supplies 12,400Service revenue 7,900Common stock 4,600
Answers (1)
Which best describes the function of the federal reserve system Administration of taxes Control of money supply Oversight of international trade Regulation of commerce
Answers (1)
The following data for the current year ended December 31, 2016, was extracted from the accounting records of Xender Co.
Answers (1)
Which of the following represents a broad product-market within the generic market of outdoor adventures?
Answers (1)
Penelope has decided to start contributing to her 401 (k) plan at work. She will contribute 6% of her weekly salary and her company will match 4% of her salary.
Answers (1)
New Questions in Business
A good interviewee will be prepared to explain how they would handle a situation or illustrate an answer with a personal experience.
Answers (1)
The method by which consumers acquire products and services
Answers (1)
FinanceCo lent $8 million to Corbin Construction on January 1, 2021, to construct a playground. Corbin signed a three-year, 6% installment note to be paid in three equal payments at the end of each year. Required: 1.
Answers (1)
The financial statements of Weston Office Supply include the following items:20172016Cash $43,500 $50,000Shortminus-term Investments 27,000 17,000Net Accounts Receivable 102,000 97,000Merchandise Inventory 125,000 119,000Total Assets 527,000
Answers (1)
Stuart Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on total cost.
Answers (1)
Home » Business » Whispering Corporation factors $276,900 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables.
Sign Up Forgot Password?