Question 3 (10 marks) Wilson Corporation reports a current ratio of 2-to-1 in its 2019...
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Question 3 (10 marks) Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $2,554,000 and current liabilities of $1,338,000. Accounts receivable are $750,400 of the current assets. Wilson Corporation is considering transferring $350,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $308,500 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Ref Account Titles and Explanation Debit Credit 3) Recalculate the current ratio reflecting first the sale/derecognition and then borrowing. Round your answers to two decimal places
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