F: [Show all work in detail, step-by -step, with explanations] and only answer if you are absolutely certain, please.

Tasel Corporation factors $262,500 of accounts receivable with Ulta Financing, Inc. on a with recourse basis. Ulta Financing will collect the receivables. The receivables records are transferred to Ulta Financing on August 15, 20 . Ulta Financing assesses a finance charge of 3% of the amount of accounts receivable and also reserves an amount equal to 5% of accounts receivable to cover probable adjustments.

Instructions

(a) What conditions must be met for a transfer of receivables with recourse to be accounted for as a sale?

(b) Assume the conditions from part (a) are met. Prepare the journal entry on August 15, 2020 for Tasel to record the sale of receivables, assuming the recourse obligation has a fair value of $3,000.

Purchases Sales

September 1(beg. Bal) 300@ $12.00 Sep 4 400 units

Sep. 3 200@ 12.10 Sep. 17 600 units

Sep. 12 300@ 12.25 Sep. 27 300 units

Sep. 16 300@ 12.30 Sep, 30 200 units

Sep. 22 500@ 12.30

Sep. 26 300@ 12.40