Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $1,021,600 and current liabilities of $535,200. Accounts receivable are $300,160 of the current assets. Wilson Corporation is considering transferring $140,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $123,400 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref Debit Credit

Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $1,021,600 and current liabilities of $535,200. Accounts receivable are $300,160 of the current assets. Wilson Corporation is considering transferring $140,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $123,400 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Account Titles and Explanation Ref Debit Credit

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 44BE: Write-Off of Uncollectible Accounts King Enterprises had 27 customers utilizing its financial...

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