On September 1, Global Company factored $1,000,000 of accounts receivable with Marks Financing on a without recourse basis. Under the arrangement, Marks Financing was to make the collections, handle the sales discounts, and absorb the credit losses. Marks Financing assessed a finance charge of 4% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts Required: a Prepare the journal entry required on Marks Financing on September 1. b. Assume Global Company factors the $1,000,000 of accounts receivable with Marks Financing on a with recourse basis. Prepare the journal entry required on Global

On September 1, Global Company factored $1,000,000 of accounts receivable with Marks Financing on a without recourse basis. Under the arrangement, Marks Financing was to make the collections, handle the sales discounts, and absorb the credit losses. Marks Financing assessed a finance charge of 4% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts Required: a Prepare the journal entry required on Marks Financing on September 1. b. Assume Global Company factors the $1,000,000 of accounts receivable with Marks Financing on a with recourse basis. Prepare the journal entry required on Global

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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