How would you journalize the factoring of $200,000 in receivables, without recourse, with 4% bad debt allowance recorded, 3% factoring fee, 10% interest on 36.5 day average maturity, and a 5% factor's holdback?
How would you subsequently journalize $4,500 of returns before the expiration of return privileges, and then finally the closing of the factoring arrangement?
I've only found one fundamental example of this type of problem on the Web, and it is incomplete (for example, its bad debt allowance is equal to the factor's holdback, which wouldn't necessarily happen). Thanks for any suggestions here.
How would you subsequently journalize $4,500 of returns before the expiration of return privileges, and then finally the closing of the factoring arrangement?
I've only found one fundamental example of this type of problem on the Web, and it is incomplete (for example, its bad debt allowance is equal to the factor's holdback, which wouldn't necessarily happen). Thanks for any suggestions here.