On August 4th Ridge Hill Company sells $700,000 of its accounts receivable to the Cheesecake Factoring Company
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Question:
Below are the relevant information regarding the factoring
• The fee charged for factoring service: $14,000• Balance retained by CFC: $10,000
1. Prepare the journal entry to record the transaction assuming that the factoring agreement was without recourse.
2. Prepare the journal entry or entries to record the transaction assuming that the factoring agreement was with recourse. Ridge Hill estimates the recourse obligation at $8,000.3. Prepare the journal entry to record this agreement assuming that the CFC is not permitted to pledge, assign or sell any of the receivables over the term of the contract.
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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