Business, 12.03.2020 22:05 goldie2715
Mountain High Ice Cream Company transferred $78,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,800). Mountain High anticipates a $4,800 recourse obligation. The bank charges a 2% fee (2% of $78,000), and requires that amount to be paid at the start of the factoring arrangement. Required:Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
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Mountain High Ice Cream Company transferred $78,000 of accounts receivable to the Prudential Bank. T...
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