Answer:
August 15, 2020
Dr Cash $258,594
Dr Due from factor $11,004
Dr Loss on sale of receivables $9,172
Cr Accounts receivable $275,100
Cr Recourse liability $3,670
Explanation:
Preparation of the journal entry on August 15, 2020, for Kingbird to record the sale of receivables
August 15, 2020
Dr Cash $258,594
($275,100+$3,670-$9,172-$11,004)
Dr Due from factor $11,004
Dr Loss on sale of receivables $9,172
Cr Accounts receivable $275,100
Cr Recourse liability $3,670
(Being to record the sale of receivables)
Calculation for Due from factor
Due from factor = $275,100 * 0.04
Due from factor = $11,004
Calculation for Loss on sale of receivables
Loss on sale of receivables = ($275,100 * 2%) + $3,670
Loss on sale of receivables = $5,502 + $3,670
Loss on sale of receivables = $9,172