On April 1, 2020, Super Enterprises sold $750,000 of accounts receivable to Convenience Factors, Inc. on a basis with recourse basis. The recourse obligation has a fair value of $9,000. Super Enterprises will continue to manage the customer accounts, including their collection. Super Enterprises estimates this obligation has a liability value of $12,500. Convenience Factors assesses a finance charge of 4% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable. Required: a) Åssume Super Enterprises follows ASPE and the control of receivables has been given up to Convenience Factors. Prepare the journal entry required on Super's books on April 1, 2020. b) Assume Super Enterprises follows IFRS, prepare the journal entry required on Super's books on April 1, 2020. (Show all supporting calculations)

On April 1, 2020, Super Enterprises sold $750,000 of accounts receivable to Convenience Factors, Inc. on a basis with recourse basis. The recourse obligation has a fair value of $9,000. Super Enterprises will continue to manage the customer accounts, including their collection. Super Enterprises estimates this obligation has a liability value of $12,500. Convenience Factors assesses a finance charge of 4% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable. Required: a) Åssume Super Enterprises follows ASPE and the control of receivables has been given up to Convenience Factors. Prepare the journal entry required on Super's books on April 1, 2020. b) Assume Super Enterprises follows IFRS, prepare the journal entry required on Super's books on April 1, 2020. (Show all supporting calculations)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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