Question: Below is the transaction that happened for Mount Inc. Beginning-of-the-year Accounts Receivable balance was $147,000. Net sales for the year were $1,725,000.$140,000 of the sales

Below is the transaction that happened for Mount Inc.

  1. Beginning-of-the-year Accounts Receivable balance was $147,000.
  2. Net sales for the year were $1,725,000.$140,000 of the sales were cash sales.Mount does not offer cash discounts for early payment.
  3. Collections on accounts receivable during the year were $1,517,000.

Mount plans to factor accounts receivable totaling $80,000 at the end of the year.

Mount will transfer the accounts to Herts, Inc. with recourse. Herts will retain 3% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,900.

What would be the journal entry for these transactions?

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