On May 1, Onyx, Inc factored $ 600,000 of accounts receivable with Cookie Finance without recourse Cookie Finance assessed a finance charge of 6 of the total accounts receivable factored and retained an amount equal to 2 (i e , there is a 2 hold back) Assume the transaction is a sale Required a Pre...

Hold back 2 x 600000 12000 Finance Fee 6 x 600000 36000 Part Account ...

On May 1, Onyx, Inc. factored $ 600,000 of accounts receivable with Cookie Finance without recourse. Cookie

Question:

On May 1, Onyx, Inc. factored $ 600,000 of with Cookie Finance without recourse. Cookie Finance assessed a finance charge of 6% of the total factored and retained an amount equal to 2% (i. e., there is a 2% hold back). Assume the transaction is a sale.
Required
a. Prepare the journal entry required on Onyx’s books on May 1.
b. Now assume Onyx factors the $ 600,000 of with Cookie Finance with recourse. The recourse provision has a fair value of $ 10,000. Prepare the journal entry required on Onyx’s books on May 1. 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...