Flounder Corp. factors $370,000 of accounts receivable with Culver Finance Corporation on a without recourse...
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Flounder Corp. factors $370,000 of accounts receivable with Culver Finance Corporation on a without recourse basis on July 1, 2020. The receivables records are transferred to Culver Finance, which will receive the collections. Culver Finance assesses a finance charge of 1.70% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. (a) Prepare the journal entry on July 1, 2020, for Flounder Corp. to record the sale of receivables without recourse. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2020
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