Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of...

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Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $638,500 and current liabilities of $334,500. Accounts receivable are $187,600 of the current assets. Wilson Corporation is considering transferring $87,500 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $77,125 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref I Debit Credit Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $638,500 and current liabilities of $334,500. Accounts receivable are $187,600 of the current assets. Wilson Corporation is considering transferring $87,500 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $77,125 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref I Debit Credit

Answer rating: 100% (QA)

Answer Requirement 1 Prepare the following journal entry when the receivables are sold to a third pa... View the full answer