Recall 3 year-old Manny, at the beginning of the chapter, who has & a seizure disorder. He receives his care in a mobile van sent to his community by the….
Prepare the journal entry on July 11, 2015, for Opal Co. Ltd. to record the securitization of the receivables, assuming it follows ASPE
Opal Co. Ltd. transfers $400,000 of its accounts receivable to an independent trust in a securitization transaction on July 11, 2015, receiving 95% of the receivables balance as proceeds. Opal will continue to manage the customer accounts, including their collection. Opal estimates this obligation has a liability value of $14,000. In addition, the agreement includes a recourse provision with an estimated value of $12,000. The transaction is to be recorded as a sale.
Required: Prepare the journal entry on July 11, 2015, for Opal Co. Ltd. to record the securitization of the receivables, assuming it follows ASPE.