Trell Corporation transferred $55,000 of accounts receivable to a local bank. The transfer was made without recourse. The local bank remits 60% of the factored amount to Trell and retains the remaining 40%. When the bank collects the receivables, it will remit to Trell the retained amount less a fee equal to 1% of the total amount factored. Trell estimates a fair value of its 15% interest in the receivables of $10,500 (not including the 1% fee). Trell will show an amount receivable from factor of:
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Home » Business » Trell Corporation transferred $55,000 of accounts receivable to a local bank. The transfer was made without recourse. The local bank remits 60% of the factored amount to Trell and retains the remaining 40%.