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Exercise 7-18 Factoring of accounts receivable without recourse [LO7-8]Mountain High Ice Cream Company transferred $67,000 of accounts receivable to the Prudential Bank.The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain Highand retains 10%. When the bank collects the receivables, it will remit to Mountain High the retainedamount (which Mountain estimates has a fair value of $5,700) less a 3% fee (3% of the total factoredamount).

Required:Prepare the journal entry to record the transfer on the books of Mountain High assuming that the salecriteria are met. (If no entry is required for a particular event, select "No journal entry required" inthe first account field.)

view transaction list journal entry worksheet

Event General Journal Debit Credit

1 Cash 60,300

Receivable from factor 3,690

Loss on sale of receivables 3,010

Accounts receivable 67,000

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