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Mountain High Ice Cream Company transferred $80,000 of accounts receivable to the Prudential Bank. The...

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Accounting

Mountain High Ice Cream Company transferred $80,000 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 $7,000) less a 2% fee (2% 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.
\table[[Event,General Journat,Debit,Credit],[1,Cash,54,000,],[,Loss on sale of receivables,2,200,],[,Receivable from factor,3,800,],[,Accounts receivable,,60,000],[,,,],[,,,]]
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