The fair value of the recourse liability


Sun Inc. factors $2,000,000 of its accounts receivables with recourse for a finance charge of 3%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. Sun estimates the fair value of the recourse liability at $100,000. What amount would be recorded as a gain (loss) on the transfer of receivables?

 

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Accounting Basics: The fair value of the recourse liability
Reference No:- TGS0555844

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