Ayayai Enterprises sold $700,000 of accounts receivable to Kingbird Factors, Inc. on a with recourse...
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Ayayai Enterprises sold $700,000 of accounts receivable to Kingbird Factors, Inc. on a with recourse basis under ASPE, as the risks and rewards have been transferred to Kingbird. The transaction meets the criteria for a sale, and no asset or liability components of the receivables are retained by Ayayai. Kingbird Factors assesses a finance charge of 3% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable. Prepare the journal entry for Ayayai to record the sale, assuming that the recourse obligation has a fair value of $9,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
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