Cheyenne Incorporated factored $133,800 of accounts receivable
with Ayayai Factors Inc. on a without-recourse basis. Ayayai
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 entry for Cheyenne Incorporated and Ayayai
Factors to record the factoring of the accounts receivable to
Ayayai. (If no entry is required, select "No Entry" for
the account titles and enter 0 for the amounts. Credit account
titles are automatically indented when the amount is entered. Do
not indent manually.)
No. |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
Cheyenne |
|||
1. |
enter an account title for the journal entry for Cheyenne |
enter a debit amount |
enter a credit amount |
enter an account title for the journal entry for Cheyenne |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry for Cheyenne |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry for Cheyenne |
enter a debit amount |
enter a credit amount |
|
Ayayai |
|||
2. |
enter an account title for the journal entry for Ayayai |
enter a debit amount |
enter a credit amount |
enter an account title for the journal entry for Ayayai |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry for Ayayai |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry for Ayayai |
enter a debit amount |
enter a credit amount |
Answer:
Cheyenne | |||
Debit | Credit | ||
Cash | 123096 | =133800*(1-6%-2%) | |
Due from Factor | 8028 | =133800*6% | |
Loss on Sale of Receivable | 2676 | ||
Accounts Receivable | 133800 | ||
Ayayai | |||
Accounts Receivable | 133800 | ||
Due to Customer | 8028 | ||
Interest/Finance Revenue | 2676 | ||
Cash | 123096 |
Get Answers For Free
Most questions answered within 1 hours.