Exercise 7-19 Concord Corp. factors $351,000 of accounts receivable with Marigol

Question

Exercise 7-19 Concord Corp. factors $351,000 of accounts receivable with Marigold Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Marigold Finance, which will receive the collections. Marigold Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. Prepare the journal entry on July 1, 2017, for Concord 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 SHOW LIST OF ACCOUNTS LINK TO TEXT

Explanation / Answer

Jul-01 Cash 330291 Due from Factor 14040 =351000*4% Loss on Sale of Receivables 6669 =351000*1.9%        Accounts Receivable 351000 2 Jul-01 Accounts Receivable          351000         Due to JFK Corp 14040          Financing Revenue 6669          Cash 330291

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