White Corporation has entered into an agreement to transfer accounts receivable to Murphy Company. Under the terms of this agreement, White receives 80% of the value of all the transferred accounts receivable (to reflect credit risk) and is charged a 1% service charge, which is based upon the dollar amount of transferred receivables. Interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue to be collected by White with any cash flows being remitted to Murphy at the end of each month. White is not allowed to transfer the receivables to anyone else. White normally transfers its accounts receivable. The following selected 2019 transactions relate to this agreement: Dec
1 Accounts receivable of $160,000 are transferred.
11 A sales return of $1,000 on a transferred account is made.
31 Collections are made on $80,000 of the transferred accounts receivable plus interest for the month of December. This amount is remitted to Murphy.

Required:

1. Assume that White uses U. S. GAAP.
a. Prepare journal entries on White’s books to record the preceding transactions.
b. How would this agreement be reported on White’s December 31, 2019, balance sheet (assume the note payable is short-term)?

2. Assume that White uses IFRS:
a. Prepare journal entries on White’s books to record the preceding transactions.
b. How would this agreement be reported on White’s December 31, 2019, balance sheet (assume the note payable is short-term)?