Mac Antiques, Inc. sold $ 15,780,000 of its accounts receivable to Maximum Cash Capital (MCC). MCC charges

Question:

Mac Antiques, Inc. sold $ 15,780,000 of its to Maximum Cash Capital (MCC). MCC charges a fee equal to 5% of the receivables factored and holds back an additional 2% as security. MCC will return the hold back to Mac when the receivables are collected. This transaction is to be recorded as a sale.
Required
a. Prepare the journal entry required to record the sale of receivables assuming that the receivables are factored without recourse.
b. Independent of your answer to part (a), prepare the journal entry required to record the sale of the receivables assuming that the receivables are factored with recourse. The recourse liability is estimated as $ 175,000. 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...