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rrajan
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Joined: 14 Oct 2009
Location: Canada
Online Status: Offline
Posts: 34

Posted: 15 Oct 2009 at 06:37 \| IP Logged

Can somebody help to explain the following
Weily FAR 2009 edition Page 283 Interests that continue to be held

Facts Given
Receivable's Fair value - 16,500
Receivable's book value - 15,000
Servicing asset - 700
Seller sells 80% of receivables

Journal entry
Cash Dr. - 13200
Servicing assets Dr. - 480
Receivables Cr.- 12,000
Gain Cr. - 1,680

My doubt is how they arrive 480 and how bookvalue 0f 80% allocated between receivables sold and servicing asset?

Thanks in advance

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