Speed Motorcycles sold $550,000 of receivables to a factor to increase the company's liquidity. The company chose to factor these receivables without recourse. In exchange for these receivables, the factor paid Speed $485,000 on the date of transfer. Ultimately, the factor collected $525,000 from these receivables.
Record the entry on Speed's books relating to the $550,000 factoring of accounts receivable.

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The Answer of Speed Motorcycles sold $550,000 of receivables to a factor to increase the company's liquidity. The company chose to factor these receivables without recourse. In exchange for these receivables, the factor paid Speed $485,000 on the date of transfer. Ultimately, the factor collected $525,000 from these receivables.
Record the entry on Speed's books relating to the $550,000 factoring of accounts receivable.

Speed Motorcycles Sold $550,000 of Receivables to a Factor to Increase