Mountain High Ice Cream Company transferred $63,000 of accounts receivable to th

Question

Mountain High Ice Cream Company transferred $63,000 of accounts receivable to the Prudential Bank. The transfer was made wit recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. when the bank collects the receivables will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,300) less a 3% fee (3% of the tota factored amount Required Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. (If no entry required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the transfer of accounts receivable. Note: Enter debits before credits. Event General Journal DebitCredit Record entry Clear entry View general journal

Explanation / Answer

Cash 56700 =90%*63000 Loss on sale of receivables 2890 Receivable from factor 3410 =5300-(63000*3%)         Accounts receivable 63000

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