7-19

Ayayai Corp. factors $427,000 of accounts receivable with Pina Finance Corporation on a without recourse basis on July 1, 2017. the receivables records are transferred to Pina Finance, which will receive the collections. Pina Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. the transaction is to be recorded as a sale. Prepare the journal entry on July 1, 2017, for Anaya Corp. to record the sale of receivables without recourse. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)