On July 5 Poorco. sells $60,000 of receivables to Finco.without recourseon a notification basis. The financing charge is 6.5%, and there is an 8% holdback for sales discounts and returns.

Assume the sales discounts amounted to $700 and sales returns amounted to $1,800.

Uncollectible accounts were estimated at $600 but actually were $400.

Required:

1. For Poorco., provide the following journal entries:

• The entry to record the sale of the receivables.
• The entry to adjust the "Receivable from factor" account for discounts and returns.
• The entry to record final payment from Finco.

1. For Finco., provide the following journal entries:

• The entry to record the purchase of the receivables.
• The entry to record bad debts expense and write off the uncollectible accounts.
• The entry to record the customer payments.
• The entry to record final payment to Poorco.
• The entry to adjust the estimate for bad debts.