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  3. blue enterprises sold $765,000 of accounts receiva

Blue Enterprises sold $765,000 of accounts receivable to Larkspur Factors, Inc. on a with recourse...

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Accounting

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Blue Enterprises sold $765,000 of accounts receivable to Larkspur Factors, Inc. on a with recourse basis under ASPE, as the risks and rewards have been transferred to Larkspur. The transaction meets the criteria for a sale, and no asset or liability components of the receivables are retained by Blue. Larkspur Factors assesses a finance charge of 5% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable. Prepare the journal entry for Blue to record the sale, assuming that the recourse obligation has a fair value of $9,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)

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