Homework answers / question archive / Sunrise Inc

Sunrise Inc

Accounting

Share With

Sunrise Inc. factored $164,900 of accounts receivable with First Factor Corporation on a without-

 recourse basis. First Factor assesses a 2% finance charge of the amount of accounts receivable and retains

 an amount equal to 6% of accounts receivable for possible adjustments.

Instructions:

(a) Prepare the journal entry required on Sunrise's books.

(b) Prepare the journal entry required on First Factor's books.