Word File Edit View Insert Format Tools 89% Sun 10:28 PM a AutoSave OFF Sue Table Window Help w Chapter 9 Case Assignment - Receivables Mailings Review View Tell me Q Home Insert Draw Design Layout References Share Comments Arial 10.5 Aa A E A T V AaBbDdEe AaBbCcDdEe AaBbCcDc AaBbCcDdEt AaBb AaBbCcDd Ee Paste B I x APA Normal ev X No Spacing Heading 1 Heading 2 Title Subtitle Dictate Styles Pane Sensitivity Chapter 9 - Graded Assignment (Problems/Cases) Instructions: Students should complete responses to each of the following three problems/cases. Problem 9.1 - Accounting for Securitization (LO 9.7) Kendall Corporation designs and manufactures sports cars. During the course of its business, Kendall generates substantial receivables from its customers. On July 1, 20X1, to improve its cash flow, Kendall establishes a securitization entity (SE) and (1) transfers without recourse $20.5 million of its receivables to the SE and (2) surrenders control over these receivables. The SE then sells securities backed by the cash flows associated with Kendall's receivables. Because the SE is separate from Kendall, and the receivables are diversified across hundreds of customers, investors are willing to pay $24 million for the securities. The SE then transfers the $24 million to Kendall Corporation. Required: 1. Prepare Kendall's entry to record the securitization as a sale. + No. Transaction General Journal Debit Credit 2. Show how your answer to requirement 1 would change if control over the receivables is not surrendered at the time of the transfer (i.e., an agreement exists whereby Kendall would be forced to absorb significant losses associated with the SE's receivables). No. Transaction General Journal Debit Credit Page 1 of 3 680 words X English (United States) O Focus E E 135% ? 19 ? ? ? tv w