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Gringo Corporation factors $250,000 of accounts receivable with Winkler Financing, Inc. on a with recourse basis. Winkler Financing will collect the receivables. The receivables records are transferred to Winkler Financing on August 15, 2010. Winkler Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.

Prepare the journal entry on August 15, 2010, for Gringo to record the sale of receivables, assuming the recourse obligation has a fair value of $3,000. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

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Category:- Accounting Basics
Reference No.:- M9439421

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