Problemarness woodcrafters sells 250000 of receivables to, Ask an Expert

Accounting

Problem:

Arness Woodcrafters sells $250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts receivable. Arness estimates the fair value of the recourse liability to be $8,000.

Required:

Question: Prepare the journal entry for Arness to record the sale.

Note: Please provide reasons to support your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164809

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