Business, 02.04.2021 04:00 lilmamaforev5093

Kingbird Corporation factors $275,100 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments. (b) Assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Kingbird to record the sale of receivables, assuming the recourse obligation has a fair value of $3,670.

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Kingbird Corporation factors $275,100 of accounts receivable with Kathleen Battle Financing, Inc. on...