Sykes corp factors 100000 of accounts receivable with ktt

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SYKES Corp. factors $100,000 of accounts receivable with KTT Finance Corporation on a without recourse basis on July 1, 2014. The receivables records are transferred to KTT Finance, which will receive the collections. KTT Finance assesses a finance charge of 2% of the amount of ccounts receivable and retains an amount equal to 5% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.

Instructions

(a) Prepare the journal entry on July 1, 2014, for SYKES Corp. to record the sale of receivables without recourse.

(b) Prepare the journal entry on July 1, 2014, for KTT Finance Corporation to record the purchase of receivables without recourse.

Reference no: EM13392790

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