Angler Fish Co. factored $540,000 of its accounts recievable to Gauze Finance Co. Gause Finance advanced 85% of the factored receivables and charged 10% commission on the gross amount of the receivables. All conditions for a sale have been met.

Required: Prepare the journal entries necessary to record the following: a. the sale of the recievables b. sales returns and allowancesnofn $2,200 on a factored account c. the conclusion of the sale agreement when angler would collect any balance remaining