Maxwell Corporation factored, with recourse, $300,000 of accounts receivable with Huskie Financing. The finance charge is...
Maxwell Corporation factored, with recourse, $300,000 of accounts receivable with Huskie Financing. The finance charge is 4%, and 6% was retained to cover sales discounts, sales returns, and sales allowances. Maxwell estimates the recourse obligation at $5,800.
Required:
Prepare Maxwell’s journal entry to record this factoring of its accounts receivable.
Homework Answers
journal entry to record this factoring of its accounts receivable.
Cash A/c dr. $2,70,000
Loss on factoring A/c dr $12,000
Due from factor A/c $18,000
To recourse liability A/c $5,800
To Accounts receivable A/c $2,94,200
(being factoring entry passed for trade receivables)
I hope the above provided journal entry is helpful to you.
If the above provided journal entry is understandable and if you feel that you have understood the entry please give positive feedback.
Thank you.
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