Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon. (hint: you may or may not need all the debits and credits) 1 2 3 41 A LO 5 6 7 8 9 Ref Account Titles Adjusting Entries Debit Credit 1 2 13 4 +56 ∞ O 17 18 19

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Sale of Receivables
Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with
recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and
retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a
recourse liability to cover bad debts of $15,000.
Subsequently, the factor collected $283,000 in cash from the accounts receivable
Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon.
(hint: you may or may not need all the debits and credits)
1
2
3
41
A
LO
5
6
7
8
9
Ref
Account Titles
Adjusting Entries
Debit
Credit
1
2
13
4
+56 ∞ O
17
18
19
Transcribed Image Text:Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon. (hint: you may or may not need all the debits and credits) 1 2 3 41 A LO 5 6 7 8 9 Ref Account Titles Adjusting Entries Debit Credit 1 2 13 4 +56 ∞ O 17 18 19
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education