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Lincraft Corp. reports a current ratio of 3-to-1 in its 202 financial statements. The statement of financial position shows current assets of $3,140,500 and current liabilities of $1,064,100. Lincraft has accounts receivable of $1,299,300. The company transfers $1,002,000 of these accounts receivable to a financial institution. There are $35,200 of bad debts associated with these accounts receivable, an amount that is already in the allowance for doubtful accounts. Proceeds of $898,250 are received from the transfer. The transfer is on a non-notification basis, which means that the customers pay Lincraft and Lincraft then remit the cash to the financial institution. The customers pay $946,000 to Lincraft on schedule, $35,200 is written off to the allowance at the appropriate time, and the cash remittance is forwarded to the financial institution. Required: 1. Record all journal entries for the sequence of events assuming: a. The transfer is recorded as a sale/derecognition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) \begin{tabular}{l} 1 Record the $946,000 note payable signed on the \\ $898,250 received from the transfer. \\ \hline 2 Record the $946,000 cash collected from customers. \\ \hline 3 Record the $946,000 repayment of note payable. \\ 4 Record the interest expense on the note. \\ 5 Record the write off of accounts receivable. \\ Note : = journal entry has been entered \end{tabular} 2. Calculate the current ratio, after the initial entry for the transfer, recorded as a sale/derecognition and as a borrowing. (Round your answers to 2 decimal places.)