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Problem 7 ...

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Accounting

Problem 7
Hillcrest Tech, Inc. factors $3,000,000 of accounts receivable with Factor, Inc.. Factor Inc. assesses a finance charge of 2 percent of the amount of accounts receivable and retains an amount equal to 4 percent of the accounts receivable (for probable adjustments). Prepare the journal entries for Hillcrests make the following journal entries:
( 5 points)
a. For the receivables transferred without recourse.
b. For the receivables transferred with recourse, assuming estimated recourse obligation is $30,000

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