Kemano Motorcycles sold $800,000 of receivables to a factor to increase the company’s liquidity. The company chose to factor these receivables without recourse. In exchange for these receivables, the factor paid Kemano $720,000 on the date of transfer. Ultimately, the factor collected $780,000 from these receivables.
Required:
Record the entry on Kemano’s books relating to the sale of $800,000 of accounts receivable.