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On December 1, the Harrison Company Sold Without Recourse $345,000

question 113

Essay

On December 1, the Harrison Company sold without recourse $345,000 of its accounts receivable to Happy Finance Company for 85% of their value. A 10% commission on the gross value of the factored accounts was charged.
Required:
a. Prepare the journal entry to record the factoring.
b. Briefly discuss how the factored accounts are disclosed in the financial statements.


Definitions:

Population Bottleneck

A significant reduction in the size of a population due to environmental events (such as earthquakes, floods, fires, disease, or droughts) leading to a loss of genetic diversity.

Natural Selection

A process in biological evolution where certain traits become more common in a population because they contribute to an organism’s survival and reproduction.

Macroevolution

Evolution above the species level or leading to the formation of new species.

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