Sunland Corp. factors $392,000 of accounts receivable with Coronado Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Coronado Finance, which will receive the collections. Coronado Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction s to be recorded as a sale.
Prepare the Journal entry on July 1, 2017, for Sunland Corp. to record the sale of receivables without recourse.
Prepare the Journal entry on July 1, 2017, for Coronado Finance Corporation to record the purchase of receivables without recourse.