Question: On May 1 4 , 2 0 2 4 , Gilbert Enterprises Inc. factored receivables with Sullivan Company. The receivables are factored on a with

On May 14,2024, Gilbert Enterprises Inc. factored receivables with Sullivan Company. The
receivables are factored on a with recourse basis. The following information pertains to the
arrangement:
6 marks
Carrying value of the receivables factored
Finance charge
Amount withheld by factor for sales returns and allowances
Fair value of recourse obligation
Gilbert Enterprises Inc. and Sullivan Company both follow ASPE.
Required:
Prepare the journal entry required by Gilbert Enterprises Inc. to account for the factoring
arrangement (4 marks).
Prepare the journal entry required by Sullivan Company to account for the factoring
arrangement (2 marks).
On May 14,2024, Gilbert Enterprises Inc. factored receivables with Sullivan Company.

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