LarkspurWoodcrafters sells $223,000of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of6% and retains an amount equal to5% of accounts receivable.Larkspurestimates that the recourse liability has a fair value of $4,910instead of $9,820estimated earlier.

Prepare the journal entry forLarkspurto record the sale.

What are the effects of this change in the value of the recourse liability onLarkspur's financial statements?

Larkspur's income will be Lower or Higher by $

Larkspur'sassets or liabilities will be lower or higher by $