On March 1, 2019, Seymour Inc assigns its accounts receivable of 300,000 to Minnesota financing company with recourse. Minnesota financing company, the factor, charges a 4% fee and retains 10% for future returns and allowances. The recourse obligation is estimated by Seymour to be $21,000. On March 1, 2019, there was already an allowance for bad debts relating to these receivables of 15,000 (credit) in Seymour's books. (hint: Seymour must remove the allowance as part of the sale of its receivables, which results in a reduced loss on the sale of receivables.) provide 1.)Seymour's journal entry:
On March 1, 2019, Seymour Inc assigns its
1.)Seymour's
2.) assume during march Minnesota financing company is able to collect 273,000 and notifies Seymour of 5,000 of returns, 2,000 of sales discounts, and 22,000 of uncollectible accounts. provide the appropriate journal entry for Seymour to reflect these events. (hint: additional loss)
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