Question - Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments.
Assume that the receivables are sold with recourse. Prepare the journal entry for Wood to record the sale, assuming that the recourse obligation has a fair value of $7,500.