On December 1, the Harrison Company sold $345,000 of its accounts receivable to Happy Finance Company for 85% of their value. A 10% commission on the gross value of the factored accounts was charged, and the factoring was without recourse.
Required:
a.Prepare the journal entry to record the factoring.
b.Briefly discuss how the factored accounts are disclosed in the financial statements.

Question

On December 1, the Harrison Company sold $345,000 of its accounts receivable to Happy Finance Company for 85% of their value. A 10% commission on the gross value of the factored accounts was charged, and the factoring was without recourse.
Required: 
a.Prepare the journal entry to record the factoring.
b.Briefly discuss how the factored accounts are disclosed in the financial statements.

Quizplus · Accepted Answer

The Answer of On December 1, the Harrison Company sold $345,000 of its accounts receivable to Happy Finance Company for 85% of their value. A 10% commission on the gross value of the factored accounts was charged, and the factoring was without recourse.
Required: 
a.Prepare the journal entry to record the factoring.
b.Briefly discuss how the factored accounts are disclosed in the financial statements.

On December 1, the Harrison Company Sold $345,000 of Its