Ask Question
10 August, 17:15

Ames Quartet Inc. factors receivables with a carrying amount of $200,000 to Joffrey Company for $160,000 on a with recourse basis. The recourse provision has a fair value of $1,000. This transaction should be recorded as a sale. Prepare the appropriate journal entry to record this transaction on the books of Ames Quartet Inc.

+5
Answers (1)
  1. 10 August, 17:30
    0
    Ames Quartet Inc Debit Credit

    cash $160000

    loss on sale $40000

    Account receivable 160000

    recourse liability 1000

    Explanation:

    Factoring with recourse refers to a practice where a company sells it' s loan or receivable to a factor or another company for immediate cash. The factor is guaranteed an amount called ' Recourse'.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Ames Quartet Inc. factors receivables with a carrying amount of $200,000 to Joffrey Company for $160,000 on a with recourse basis. The ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers