Question

On July 15, Central States Corporation factored $250,000 of accounts receivable with Franklin Factors on a...

On July 15, Central States Corporation factored $250,000 of accounts receivable with Franklin Factors on a without recourse basis. Under the arrangement, Central was to handle disputes concerning service, and Franklin Factors was to make the collections, handle the sales discounts, and absorb the credit losses. Franklin assessed a finance charge of 4% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts. (2 points)

            (a) Prepare the journal entry required on Central's books on July 15.

Date

Account Titles

Debit

Credit

(b) Prepare the journal entry required on Franklin Factors' books on July 15.

Date

Account Titles

Debit

Credit

Assume Central States factors the $250,000 of accounts receivable with Franklin Factors on a with recourse basis instead. The recourse provision has a fair value of $1,000.

            (c) Prepare the journal entry required on Central's books on July 15.

Date

Account Titles

Debit

Credit

(d) Prepare the journal entry required on Franklin Factors' books on July 15.

Date

Account Titles

Debit

Credit
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Nash Corp. factors $365,000 of accounts receivable with Crane Finance Corporation on a without recourse basis...
Nash Corp. factors $365,000 of accounts receivable with Crane Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Crane Finance, which will receive the collections. Crane Finance assesses a finance charge of 1.50% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. Prepare the journal entry on July 1,...
Cheyenne Incorporated factored $133,800 of accounts receivable with Ayayai Factors Inc. on a without-recourse basis. Ayayai...
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...
Sarasota Incorporated factored $167,400 of accounts receivable with Ivanhoe Factors Inc. on a without-recourse basis. Ivanhoe...
Sarasota Incorporated factored $167,400 of accounts receivable with Ivanhoe Factors Inc. on a without-recourse basis. Ivanhoe assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entry for Sarasota Incorporated and Ivanhoe Factors to record the factoring of the accounts receivable to Ivanhoe. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...
Riverbed Incorporated factored $139,300 of accounts receivable with Marin Factors Inc. on a without-recourse basis. Marin...
Riverbed Incorporated factored $139,300 of accounts receivable with Marin Factors Inc. on a without-recourse basis. Marin assesses a 3% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments. Prepare the journal entry for Riverbed Incorporated and Marin Factors to record the factoring of the accounts receivable to Marin. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...
On May 1, Dexter, Inc. factored $1,600,000 of accounts receivable with Quick Finance on a without...
On May 1, Dexter, Inc. factored $1,600,000 of accounts receivable with Quick Finance on a without recourse basis. Under the arrangement, Dexter was to handle disputes concerning service and returns of purchases. Quick Finance was to make the collections, and absorb any credit losses for bad debts. Quick Finance assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts. (d) Prepare the entry...
On May 1, COVID Co. factored €800,000 of accounts receivable with Virus Co. on the basis...
On May 1, COVID Co. factored €800,000 of accounts receivable with Virus Co. on the basis that all the risks of collectability and credit losses on the purchaser. Virus Co. assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts. Required: (a) Prepare the journal entry required on COVID Co.’s books on May 1. (b) Assume COVID Co. factors the €800,000 of accounts...
1. Nash Inc. factors receivables with a carrying amount of $247,900 to Joffrey Company for $172,700...
1. Nash Inc. factors receivables with a carrying amount of $247,900 to Joffrey Company for $172,700 on a with recourse basis. The recourse provision has a fair value of $1,640. This transaction should be recorded as a sale. Prepare the appropriate journal entry to record this transaction on the books of Nash Inc. (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...
Question 80.5/1 View Policies Show Attempt History Current Attempt in Progress Shamrock Corp. factors $370,000 of...
Question 80.5/1 View Policies Show Attempt History Current Attempt in Progress Shamrock Corp. factors $370,000 of accounts receivable with Bridgeport Finance Corporation on a without recourse basis on July 1, 2020. The receivables records are transferred to Bridgeport Finance, which will receive the collections. Bridgeport Finance assesses a finance charge of 1.70% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be...
Wildhorse Incorporated factored $123,000 of accounts receivable with Sheffield Factors Inc. on a without-recourse basis. Sheffield...
Wildhorse Incorporated factored $123,000 of accounts receivable with Sheffield Factors Inc. on a without-recourse basis. Sheffield 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 Wildhorse Incorporated and Sheffield Factors to record the factoring of the accounts receivable to Sheffield.
Martinez Corp. factors $705,000 of accounts receivable with Tamarisk, Inc., Inc. on a with recourse basis....
Martinez Corp. factors $705,000 of accounts receivable with Tamarisk, Inc., Inc. on a with recourse basis. Tamarisk, Inc. will collect the receivables. The receivable records are transferred to Tamarisk, Inc. on August 15, 2020. Tamarisk, Inc. assesses a finance charge of 2.0% of the amount of accounts receivable and also reserves an amount equal to 5.00% of accounts receivable to cover probable adjustments. Martinez prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT