Current Attempt in Progress Skysong Corporation factors $252,500 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 Skysong to record the sale of receivables, assuming the recourse obligation has a fair value of $4,390. (If no entry is requlred, 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.)

Current Attempt in Progress Skysong Corporation factors $252,500 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 Skysong to record the sale of receivables, assuming the recourse obligation has a fair value of $4,390. (If no entry is requlred, 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.)

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 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

100%

**Current Attempt in Progress**

Skysong Corporation factors $252,500 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 Skysong to record the sale of receivables, assuming the recourse obligation has a fair value of $4,390.

*(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)*

| Date | Account Titles and Explanation | Debit | Credit |
|-------------|--------------------------------|-------|--------|
| Aug. 15, 2020 | | | |
| | | | |
| | | | |
| | | | |
| | | | |

This table is used to detail the journal entries required to record the transaction.

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