Question: Wazowski Enterprises sells $55,000 of its customer receivables to Randall Corp without recourse. Randall charges a 6% factoring fee for this service.
Required: a. What journal entry will be made by Wazowski to record the transaction?
b. What would be the journal entry made by Wazowski if this sale was with a recourse obligation of $5,000?
c. Now, ignoring the previous part (2B), suppose this sale has a return provision. Randall will retain 4% to account for the possibility of sales returns. Record the journal entry that Wazowski would make.