Cedar Ridge Furnishings sells $300,000 of accounts receivable to Midwest Financing Inc. on a with recourse basis. Midwest assesses a finance charge of 6% and retains an amount equal to 3% of the receivables. Cedar Ridge estimates the fair value of the recourse liability to be $9,000. Prepare the journal entry for Cedar Ridge to record the sale of receivables.

Cedar Ridge Furnishings sells $300,000 of accounts receivable to Midwest Financing Inc. on a with recourse basis. Midwest assesses a finance charge of 6% and retains an amount equal to 3% of the receivables. Cedar Ridge estimates the fair value of the recourse liability to be $9,000. Prepare the journal entry for Cedar Ridge to record the sale of receivables.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....

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Accounting Arness woodcrfters .
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On June , 2019 , XYZ Company factored receivables of \$700,000 to ABC Company . ABC Company assesses a finance charge of 1% of the receivables and retains 4% of the receivables . Assume that XYZ Company factors the receivables on a without guarantee (without recourse ) basis . The journal entry to be recorded by XYZ company is:
Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair value of $7,500. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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