Vaughn Incorporated sold $166,000 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. Prepare the journal entries for Vaughn Incorporated and Gannon Factors to record the sale of the accounts receivable to Gannon assuming that the recourse liability has a fair value of $9,100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Vaughn Incorporated Gannon Factors
Vaughn Incorporated sold $166,000 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. Prepare the journal entries for Vaughn Incorporated and Gannon Factors to record the sale of the accounts receivable to Gannon assuming that the recourse liability has a fair value of $9,100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Vaughn Incorporated Gannon Factors
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Vaughn Incorporated sold $166,000 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. Prepare the journal entries for Vaughn Incorporated and Gannon Factors to record the sale of the accounts receivable
to Gannon assuming that the recourse liability has a fair value of $9,100. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Vaughn Incorporated
Gannon Factors](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d0999f2-f01d-4f27-9d32-a4f15ffb06ff%2F60be2f3b-9815-4d1d-8a8c-012dacb93433%2F6tuv7f8_processed.png&w=3840&q=75)
Transcribed Image Text:Vaughn Incorporated sold $166,000 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. Prepare the journal entries for Vaughn Incorporated and Gannon Factors to record the sale of the accounts receivable
to Gannon assuming that the recourse liability has a fair value of $9,100. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Vaughn Incorporated
Gannon Factors
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