Marin Corp. factors $368,000 of accounts receivable with Headland Finance Corporation on a without recourse basis on July 1, 2020. The receivables records are transferred to Headland Finance, which will receive the collections. Headland Finance assesses a finance charge of 1.80% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.
Prepare the journal entry on July 1, 2020, for Headland Finance Corporation to record the purchase of receivables without recourse.
| Accounts Receivable | 368,000 | |
| Cash | 346,656 | |
| Due to customer(368,000*4%) | 14,720 | |
| Interest revenue (368,000*1.8%) | 6624 | |
Marin Corp. factors $368,000 of accounts receivable with Headland Finance Corporation on a without recourse basis...