Radisson Company requires additional cash for its business. Radisson has decided to use its accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following contemplated transactions.

1. On July 1, 2008, Radisson assigned $400,000 of accounts receivable to Stickum Finance Company. Radisson received an advance from Stickum of 85% of the assigned accounts receivable less a commission of 3% on the advance. Prior to December 31, 2008, Radisson collected $220,000 on the assigned accounts receivable, and remitted $232,720 to Stickum, $12,720 of which represented interest on the advance from Stickum.

2. On December 1, 2008, Radisson sold $300,000 of net accounts receivable to Wunsch Company for $250,000. The receivables were sold outright on a without recourse basis.

3. On December 31, 2008, an advance of $120,000 was received from First Bank by pledging $160,000 of Radisson’s accounts receivable. Radisson’s first payment to First Bank is due on January 30, 2009.

Instructions

Prepare a schedule showing the income statement effects for the year ended December 31, 2008, as a result of the above facts.