Exercise 7-19 (Part Level Submission) Tamarisk Corp. factors $414,000 of account

Question

Exercise 7-19 (Part Level Submission) Tamarisk Corp. factors $414,000 of accounts receivable with Vaughn Finance Corporation on a without recourse basis on July 1, 2017. Thecvables records are transferred to Vaughn Finance, which will receive the collections. Vaughn Finance assesses a finance charge of 1.60% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale ? (a) Prepare the journal entry on July 1, 2017, for Tamarisk Corp. to record the sale of receivables without recourse. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2017

Explanation / Answer

Date Account titles and explanation Debit Credit July 1, 2017 Cash 4386,676 Due from Factor ($414,000 × 5%) $20,700 Loss on sale of receivables ($414,000 × 1.60%) $6,624 Accounts receivable $414,000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.