Exercise 7-19 Sheffield Corp. factors $441,000 of accounts receivable with Tamar

Question

Exercise 7-19 Sheffield Corp. factors $441,000 of accounts receivable with Tamarisk Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Tamarisk Finance, which will receive the collections. Tamarisk Finance assesses a finance charge of 1.80% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.

Prepare the journal entry on July 1, 2017, for Tamarisk Finance Corporation to record the purchase of receivables without recourse. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Exercise 7-19 Sheffied Corp. factors $441,000 of accounts receiveble with Tamarisk Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Tamarisk Finance, which will receive the co lections. Tamerisk Finance assesses a finance charge of 1.60% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and alloences. The transaction is to be recorded as a sale. UWedtsirdi.htmt.-ka.es:1 Your answer is correct. If no entry is re uire select No Entry for the account titles and enter 0 for the amo nts. Credit account titles are automatically indented when Prnpare the aurnal entry n ) 1¥ 1 2017 for she fald Corp. to record the sale of recai atles without recourse. the amount is ontered. Do not indent manually-) Datc Account Titles and Explanation July 1, 2017 Ca son Saie of Recelvables Accounts Roceivable LTST OP ACCOUNTS Your answer is partially correct. Try again. Prepare the journal entry on July 1, 2017, for Tamarisk Finance Corporation to record the purchase of receivables without recourse. (I no entry is required, select "No Entry for the account tities and eiter o for the amounts. Credit account titles are automatically indented when the amount is entered, Do not indent manually,J Date Account Titles and Explanation Debit July 1, 201 Click if you would like to Show Work for this question: oen Show Work

Explanation / Answer

B.

Journal entry:

July 1, 2017 Account receivable $441,000 Due to Sheffield Corp.(441000×6%) $26,460 Financing revenue(441000×1.80%) $7,938 Cash $406,602

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