ountain High Ice Cream Company transferred $78,000 of accounts receivable to the Prudential Bank. The transfer was made without course. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it Il remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,800) less a 2% fee (2% of the total ctored amount). quired: epare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. ote: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record the transfer of accounts receivable. Note: Enter debits before credits. Event 1 General Journal Debit Credit
ountain High Ice Cream Company transferred $78,000 of accounts receivable to the Prudential Bank. The transfer was made without course. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it Il remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,800) less a 2% fee (2% of the total ctored amount). quired: epare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. ote: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record the transfer of accounts receivable. Note: Enter debits before credits. Event 1 General Journal Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Mountain High Ice Cream Company transferred $78,000 of accounts receivable to the Prudential Bank. The transfer was made without
recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it
will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,800) less a 2% fee (2% of the total
factored amount).
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
1
Record the transfer of accounts receivable.
Note: Enter debits before credits.
Event
1
General Journal
Debit
Credit
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