# 2 (continued) Part B. (6 marks). Erie Corp. has accounts receivable of $460,000. The company transfers these accounts receivable to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $444,500 are received from the transfer. The transfer is on a non-notification basis, which means that the customers pay Erie and Erie remits the cash to the financial institution. The customers pay $460,000 to Erie on schedule, and the cash remittance is forwarded to the financial institution. Required: Record the journal entries for Erie Corp. on the date of the transfer, assuming: +Case A. The transfer is recorded as a sale/derecognition by Erie Corp. (3 marks) Debit Credit Case B. The transfer is recorded as a borrowing by Erie Corp. (3 marks) Debit Credit Part C (6 marks). Delta sold a piece of equipment at the beginning of 2020, receiving a $10,000, two-year 1% (annual coupon rate) note. Interest is paid at the end of each year. The market interest rate for this kind of note is 6%. Round to the nearest dollar. Required: 1. Calculate the present value of the note receivable. You may use the present value tables at the end of the exam or your financial calculator.(2 marks) 2. Prepare entry to record the sale of equipment by Delta. (2 marks) Debit Credit 3. Prepare the entry to record the interest collection by Delta at the end of 2020. (2 marks) Debit Credit