Record the journal entries for the transfer

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Reference no: EM132742342

Question: Ball Ltd. has accounts receivable of $365,400. On November 10, 2020, the company transfers $298,000 of the accounts receivable to a financial institution. There are $3,800 of bad debts associated with these accounts receivable, an amount that is already in the allowance for doubtful accounts. Proceeds of $285,600 are received from the transfer. The transfer is on a non-notification basis. The customers pay $294,200 to Ball on schedule, $3,800 is written off to the allowance at the appropriate time, and the cash remittance is forwarded to the financial institution

Required: Record the journal entries for the transfer and receipt of payment assuming:

- The transfer is recorded as a sale/derecognition

- The transfer is recorded as a borrowing

Reference no: EM132742342

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