Prepare journal entries for samson wholesale beverage

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Reference no: EM131289528

Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2016, the company transferred $900,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits 85% of the factored amount and retains 15%. When Milpitas collects the receivables, it remits to Samson the retained amount less a 2% fee (2% of the total factored amount). Samson estimates the fair value of the last 15% of its receivables to be $70,000.

Required:

Prepare journal entries for Samson Wholesale Beverage for the transfer of accounts receivable on April 30 assuming the sale criteria are met.

Reference no: EM131289528

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