Payne Inc. transferred $2,000,000 of accounts receivable to a newly established company called Former Planets, Inc., whose sole purpose was to buy and service accounts receivable from Payne, Inc. Payne, Inc. received an 80 percent interest in Former Planets, Inc., which is a qualified special purpose entity (SPE). The remainder of the Former Planets shares was publicly traded. What method should Payne, Inc. use to account for this special purpose entity at year end?

 

Answer rating: 100% (QA)

Based on the information provided it seems that Payne Inc has transferred 2000000 of its accounts re... View the full answer