Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $1,021,600 and current liabilities of $535,200. Accounts receivable are $300,160 of the current assets. Wilson Corporation is considering transferring $140,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $123,400 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref Debit Credit
Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $1,021,600 and current liabilities of $535,200. Accounts receivable are $300,160 of the current assets. Wilson Corporation is considering transferring $140,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $123,400 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please help me
Transcribed Image Text:Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements.
The statement of financial position shows current assets of $1,021,600 and current liabilities of
$535,200. Accounts receivable are $300,160 of the current assets. Wilson Corporation is
considering transferring $140,000 of the accounts receivable with a 90-day term to a financial
institution. There are no bad debts associated with these accounts receivable. Proceeds of
$123,400 are expected from the transaction.
Required:
1) Prepare the journal entry to record the transfer as a sale/derecognition.
2) Prepare the journal entry to record the transfer as a borrowing.
General Journal
Account Titles and Explanation
Ref
Debit
Credit
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education