North Incorporated sold $300,000 of accounts receivable to Southern Inc.
Question # 00619077
Posted By:
Updated on: 11/16/2017 01:45 PM Due on: 11/16/2017
North Incorporated sold $300,000 of accounts receivable to Southern Inc. on a with recourse basis. Southern 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 entries for North Incorporated and Southern to record the sale of the accounts receivable to Southern assuming that the recourse liability has a fair value of $15,000.
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Rating:
/5
Solution: North Incorporated sold $300,000 of accounts receivable to Southern Inc.