CRC Incorporated factored $100,000 of accounts receivable with Fredrick Factors Inc. on a without recourse basis. Fredrick

Question:

CRC Incorporated factored $100,000 of accounts receivable with Fredrick Factors Inc. on a without recourse basis. Fredrick assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for CRC Incorporated and Fredrick Factors to record the factoring of the accounts receivable to Fredrick.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...