Sage Incorporated factored $134,100 of accounts receivable with Engram Factors Inc

Accounting Aug 19, 2020

Sage Incorporated factored $134,100 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments.

Prepare the journal entry for Sage to record the sale, assuming that the recourse liability has a fair value of $6,970.

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