Accounts Receivable $85,600

Allowance for Doubtful Accounts 2,940

Sales Revenue $475,600

Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.)

1. To obtain additional cash, Headland factors without recourse $24,300 of accounts receivable with Stills Finance. The finance charge is 10% of the amount factored.

2. To obtain a 1-year loan of $58,900, Headland assigns $67,000 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial.

3. The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable.

4. Based on an aging analysis, an allowance of $5,577 should be reported. Assume the allowance has a credit balance of $1,181.