McGraw Motors both sells and leases vehicles. With sales temporarily slowing due to the economy, the company factored a significant portion of its lease receivables. The company factored with recourse receivables with a carrying amount of $22 million in exchange for $21.45 million less a holdback of $550,000 for potential uncollectible accounts. Due to poor economic conditions, the actual uncollectible accounts amounted to $900,000.
Record the entries on McGraw's books relating to the $22 million factoring of lease receivables.

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The Answer of McGraw Motors both sells and leases vehicles. With sales temporarily slowing due to the economy, the company factored a significant portion of its lease receivables. The company factored with recourse receivables with a carrying amount of $22 million in exchange for $21.45 million less a holdback of $550,000 for potential uncollectible accounts. Due to poor economic conditions, the actual uncollectible accounts amounted to $900,000.
Record the entries on McGraw's books relating to the $22 million factoring of lease receivables.

McGraw Motors Both Sells and Leases Vehicles