Halen Company factored $50,000 of its accounts receivable with recourse.The factor retained 8% for sales adjustments and charged $3,000 as a financing fee.For simplicity,assume the estimated and actual amounts of the following items are equal:

Assume the transfer is recorded as a sale by Halen Company.What is the loss or financing expense to be recognized on the transfer?

Question

Halen Company factored $50,000 of its accounts receivable with recourse.The factor retained 8% for sales adjustments and charged $3,000 as a financing fee.For simplicity,assume the estimated and actual amounts of the following items are equal:

Assume the transfer is recorded as a sale by Halen Company.What is the loss or financing expense to be recognized on the transfer?

Quizplus · Accepted Answer

The Answer of Halen Company factored $50,000 of its accounts receivable with recourse.The factor retained 8% for sales adjustments and charged $3,000 as a financing fee.For simplicity,assume the estimated and actual amounts of the following items are equal:

Assume the transfer is recorded as a sale by Halen Company.What is the loss or financing expense to be recognized on the transfer?

Halen Company Factored $50,000 of Its Accounts Receivable with Recourse