Presented below are two independent situations.
(a)On March 3, Kitselman Appliances sells $650,000 of its receivables to Ervay Factors Inc. Ervay Factors assesses a finance charge of 3% of the amount of receivables sold. Prepare the entry on Kitselman Appliances’ books to record the sale of the receivables.
(b)On May 10, Fillmore Company sold merchandise for $3,000 and accepted the customer”s America Bank MasterCard. America Bank charges a 4% service charge for credit card sales. Prepare the entry on Fillmore Company”s books to record the sale of merchandise.
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