Eyoncé Corporation factors $175,000 of accounts receivable
with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect
the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2014.
Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also
reserves an amount equal to 4% of accounts receivable to cover probable adjustments.
Instructions
(a) What conditions must be met for a transfer of receivables with recourse to be accounted for as a
sale?
(b) Assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Blossom to record the sale of receivables, assuming the recourse obligation has a fair value of $3,910

Alpha company uses the periodic inventory system for purchase & sales of merchandise. discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. unless otherwise noted, fob destination will apply to all purchases & sales. the value of inventory is based on periodic system. on january 1, 2016, beginning inventory consisted of 350 units of widgets costing $10 each. alpha prepares monthly income statements. the following events occurred during the month of jan.: dateactivitya.jan. 3purchased on account 350 widgets for $11 each.b.jan. 5sold on account 400 widgets for $30 each. paid freight out with petty cash of $150.c.jan. 10purchased on account 625 widgets for $12 each.d.jan. 11shipping cost for the january 10 purchased merchandise was $400 was paid with a cheque by alpha directly to the freight company.e.jan. 12returned 50 widgets received from jan. 10 purchase as they were not the correct item ordered.f.jan. 13paid for the purchases made on jan. 3.g.jan. 21sold on account 550 widgets for $30 each. paid freight out with petty cash of $250.h.jan. 22authorize credit without return of goods for 50 widgets sold on jan. 21 when customer advised that they were received in defective condition.i.jan. 25received payment for the sale made on jan. 5.j.jan. 26paid for the purchases made on jan. 10.k.jan. 31received payment for the sale made on jan. 21.use this information to prepare the general journal entries (without explanation) for the january events. if no entry is required then enter the date and write "no entry required."