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18 points: ESTIMATED TIME 20 minutes Libby Inc. sold $500,000 of accounts receivable to Reliable...

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Accounting

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18 points: ESTIMATED TIME 20 minutes Libby Inc. sold $500,000 of accounts receivable to Reliable Finance on a with recourse basis. Reliable Finance assesses a 4.5% finance charge on the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entries for Libby incorporated and Reliable Finance to record the sale of the accounts receivable to Reliable Finance assuming that the recourse liability has a fair value of $16,000. 18 points: ESTIMATED TIME 20 minutes Libby Inc. sold $500,000 of accounts receivable to Reliable Finance on a with recourse basis. Reliable Finance assesses a 4.5% finance charge on the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entries for Libby incorporated and Reliable Finance to record the sale of the accounts receivable to Reliable Finance assuming that the recourse liability has a fair value of $16,000

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