Waterway Corporation factors $260,800 of accounts receivable with Kathleen Battle Financing, Inc. on a with recoursebasis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen BattleFinancing on August 15, 2025. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accountsreceivable 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. Preparethe journal entry on August 15, 2025, for Waterway to record the sale of receivables, assuming the recourse obligationhas a fair value of $5,000. (If no entry is required, select "No Entry" for the account titles and enter O forthe amounts. Credit account titles are automatically indented when the amount is entered. Do notindent manually. List all debit entries before credit entries.)

RECOURSE FACTORING IS THE MOST COMMON AND MEANS THAT FACTOR CAN DEMAND MONEY BACK FROM THE COMPANY…

(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, 2025, for Waterway to record the sale of receivables, assuming the recourse obligation has a fair value of $5,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for

(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, 2025, for Waterway to record the sale of receivables, assuming the recourse obligation has a fair value of $5,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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