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Exercise 7-24(Algo) Factoring of accounts receivable without recourse [L07-8] Mountain High Ice Cream...

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Accounting

Exercise 7-24(Algo) Factoring of accounts receivable without recourse [L07-8]
Mountain High Ice Cream Company transferred $79,000 of accounts receivable to the Prudential Bank. The transfer was made without
recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it
will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,900) less a 3% fee of the total
factored amount).
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Journal entry worksheet
1
Record the transfer of accounts receivable.
Note: Enter debits before credits.
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